PART    I. 


PRACTICAL  IIS  FORMATION  CONCERNING  THE  PUBUO  DEBT 
OF  THE  UNITED  STAIES, 


PRACTICAL  INFORMATION 


CONCEEHIHQ 


TEE   PUBLIC   DEBT 


OF  THE 


UNITED  STATES, 


WITH  THE 


NATIONAL  BANKING  LAWS. 


BY 

WILLIAM   A.   EICHAEDSON, 

BECRETABY  OF  THE  TBEABU3'/: 


WASHINGTON,  D.  C.: 

W.   H.   &   0.   H.   MOEEISON, 

LAW  PUBLISHERS  AND  BOOKSELLERS. 

1873. 


87 


Entered  according  to  Act  of  Congress,  in  the  year  1872,  by 

WILLIAM  A.  RICHARDSON, 
In  the  Office  of  the  Librarian  of  Congress,  at  Washington,  D.  C, 


.  •  - 

VI 


1M 


CONTENTS. 

PART    I. 

PRACTICAL  INFORMATION   CONCERNING  THE  PUBLIC  DEBT. 


CHAPTER  I.  PAGE. 

Bonded  debt  not  matured,  payable  in  coin .  7 

CHAPTER   II. 

Debt  which  has  ceased  to  bear  interest;  coin  certificates;  certifi 
cates  of  deposit;  debt  bearing  interest  in  currency 25 

CHAPTER  III. 

United  States  notes  and  fractional  currency ;  distinctive  paper; 
exchange  of  mutilated  and  defaced  notes,  etc .  35 

CHAPTER   IV. 

Registered  and  coupon  bonds,  how  transferred;  issue  of  dupli 
cates  in  case  of  loss  or  destruction;  conversion  of  bonds;  pay 
ment  of  interest ,,.-  55 

CHAPTER   V. 

Coin  in  the  treasary ;  sale  of  gold;  purchase  of  bonds;  redemp 
tion  ofbonds;  monthly  debt  statement !  72 

CHAPTER  VI. 

Obligation  to  pay  principal  and  interest  in  coin;  the  sinking 
fund;  taxation  of  United  States  bonds 79 

CHAPTER  VII. 

Established  policy  of  the  country,  coeval  with  the  constitution, 
to  maintain  the  public  credit,  to  gradually  pay  the  principal  of 
all  loans,  and  to  avoid  a  permanent  national  debt 88 


M114911 


CONTENTS. 


PART    II 

THE  NATIONAL  BANKING  LAWS  OF  THE  UNITED  STATES,  WITH  NOTES 
AND  REFERENCES  TO  THE  DECISIONS  OF  THE  COURTS  AND  OPINIONS 
OF  THE  ATTORNEYS  GENERAL  THEREON. 


1.  Preliminary  observations 99 

2.  Act  of  June  3,  1864,  authorizing  the  formation  of  national 

banks 101 

3.  Act  of  June  30,  1864,  section  no,  taxing  State  banks,  &c__    142 

4    Act  of  March  3,  1865,  taxing  notes  of  State  banks,  &c.,  and 

relating  to  State  banks  converted  into  national  banks 145 

5.  Act  of  March  2,  1867,  in  relation  to  three  per  cent,  certifi 

cates  which  may  be  held  by  banks  as  part  of  their  reserves.    147 

6.  Act  of  March  26,  1867,  section  2,  taxing  the  notes  of  towns, 

cities,  and  municipal  corporations 148 

7.  Act  of  February  10,  1868,  defining  the  "place"  where  banks 

may  be  taxed 148 

8.  Act  of  February  19,  1869,  to  prevent  the  loaning  of  money  on 

united  States  notes  and  the  withholding  of  them  from  use_    149 

9.  Act  of  March  3,  1869,  requiring  returns  from  banks 149 

10.  Act  of  March  3,  1869,  in  relation  to  certified  checks 151 

11.  Act  of  April  6,  1869,  to  punish  persons  aiding  or  abetting 

officers  of  banks  in  embezzling  funds 151 

12.  Act  of  July  8,  1870,  declaring  what  officers  are  subject  to  the 

penalties  against  embezzlement 152 

13.  Act  of  July  12,  1870,  to  provide  for  the  redemption  of  three 

per  cent,  certificates,  for  an  increase  of  national  bank  notes, 
and  for  the  formation  of  national  gold  banks 152 

14.  Act  of  July  14,  1870,  requiring  national  banks  going  into 

liquidation  to  retire  their  circulating  notes 157 

15.  Act  of  June  6,  1872,  amending  act  taxing  State  banks,  &c__    158 

16.  Regulations  as  to  payment  of  duties  by  national  banks 160 

INDEX 165 


CHAPTER  1. 


BONDED  DEBT  NOT  MATURED,  PAYABLE  IN  COIN. 


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THE  FUNDED  LOANS. 


[CHAP.  I. 


Outstanding  loans 
not  matured. 


Refunding  act  of 
1870. 


Bonds  at  5  per 
cent,  interest. 


The  bonds  of  the  United  States,  of  which  both  the  princi 
pal  and  interest  are  payable  in  coin,  now  outstanding,  and 
neither  called  in  for  payment  nor  fully  matured,  are  known 
under  fourteen  distinct  titles,  representing  that  number  of 
different  loans,  which  are  kept  entirely  separate  on  the 
books  of  the  Treasury  Department.  Coupon  bonds  may  be 
exchanged  for  registered  stock  either  in  the  same  or  other 
denominations,  and  mutilated,  defaced,  or  indorsed  bonds 
may  be  returned  and  clean  new  bonds  obtained  therefor ; 
but  all  such  exchanges  must  be  in  the  same  loan,  and  the 
bonds  of  one  issue  can  never  be  converted  into  nor  combined 
with  those  of  either  of  the  others. 

The  table  at  the  head  of  this  chapter  gives  the  titles, 
amounts,  times  of  payment  of  principal  and  interest,  and 
the  rate  of  interest  of  all  such  loans,  in  chronological  order, 
beginning  with  that  of  the  latest  date  and  extending  back 
to  that  of  the  earliest  issue,  the  loan  of  1858;  a  full  expla 
nation  of  each  of  which  is  contained  in  the  following  pages 
of  this  chapter,  under  numbers  referring  to  the  loans  as 
set  forth  in  the  table. 

1. 

THE  FUNDED  LOANS. 

To  enable  the  Secretary  of  the  Treasury  to  fund  at  a  lower 
rate  of  interest  that  part  of  the  national  debt  represented 
by  the  five-twenty  bonds,  bearing  six  per  cent,  interest, 
Congress  passed  the  following  act : 

AN  ACT  TO  AUTHORIZE  THE  REFUNDING  OF  THE  NATIONAL  DEBT. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled, 

That  the  Secretary  of  the  Treasury  is  hereby  authorized 
to  issue,  in  a  sum  or  sums  not  exceeding  in  the  aggregate 
two  hundred  million  dollars — 

Coupon  or  registered  bonds  of  the  United  States,  in  such 
form  as  he  may  prescribe,  and  of  denominations  of  fifty 
dollars,  or  some  multiple  of  that  sum,  redeemable  in  coin 
of  the  present  standard  value,  at  the  pleasure  of  the  United 
States,  after  ten  years  from  the  date  of  their  issue,  and 
bearing  interest,  payable  semi-annually,  in  such  coin,  at  the 
rate  of  five  per  cent,  per  annum  ; 


CHAP.  I.]  THE  FUNDED  LOANS.  9 

Also  a  sum  or  sums  not  exceeding  in  the  aggregate  three  At  4%  per  cent. 
hundred  million  dollars  of  like  bonds,  the  same  in  all  res 
pects,  but  payable  at  the  pleasure  of  the  United  States, 
after  fifteen  years  from  the  date  of  their  issue,  and  bearing 
interest  at  the  rate  of  four  and  a  half  per  cent,  per  an 
num  ; 

Also  a  sum  or  sums  not  exceeding  in  the  aggregate  one  At 4 percent. 
thousand  million  dollars  of  like  bonds,  the  same  in  all  res 
pects,  but  payable  at  the  pleasure  of  the  United  States, 
after  thirty  years  from  the  date  of  their  issue,  and  bearing 
interest  at  the  rate  of  four  per  cent,  per  annum ;  all  of  which 
said  several  classes  of  bonds  and  the  interest  thereon  shall 
be  exempt  from  the  payment  of  all  taxes  or  duties  of  the  Exempt  from 
United  States,  as  well  as  from  taxation  in  any  form  by  or  taxation, 
under  State,  municipal,  or  local  authority;  and  the  said 
bonds  shall  have  set  forth  and  expressed  upon  their  face 
the  above  specified  conditions,  and  shall,  with  their  coupons, 
be  made  payable  at  the  Treasury  of  the  United  States. 

But  nothing  in  this  act,  or  in  any  other  law  now  in  force,   Debt  not  to  be  in 
shall  be  construed  to  authorize  any  increase  whatever  of  the  creased- 
bonded  debt  of  the  United  States. 

SEC.  2.  And  be  it  further  enacted]  That  the  Secretary  of  Bonds,  how  sold 
the  Treasury  is  hereby  authorized  to  sell  and  dispose  of  any  nndissued- 
of  the  bonds  issued  under  this  act,  at  not  less  than  their 
par  value  for  coin^  and  to  apply  the  proceeds  thereof  to  the 
redemption  of  any  of  the  bonds  of  the  United  States  out 
standing    and  known  as  five-twenty  bonds,  at  their  par 
value,  or  he  may  exchange  the  same  for  such  five-twenty 
bonds,  par  for  par ;  but  the  bonds  hereby  authorized  shall 
be  used  for  no  other  purpose  whatsoever. 

And  a  sum  not  exceeding  one-half  of  one  per  cent,  of  the 
bonds  herein  authorized  is  hereby  appropriated  to  pay  the 
expense  of  preparing,  issuing,  advertising,  and  disposing 
of  the  same. 

SEC.  3.  And  be  it  further  enacted,  That  the  payment  of  —how  called  in 
any  of  the  bonds  hereby  authorized,  after  the  expiration  of  ^payment. 
the  said  several  terms  often,  fifteen,  and  thirty  years,  shall 
be  made  in  am'ounts  to  be  determined  from  time  to  time  by 
the  Secretary  of  the  Treasury,  at  his  discretion,  the  bonds 
so  to  be  paid  to  be  distinguished  and  described  by  the  dates 
and  numbers,  beginning  for  each  successive  payment  with 
the  bonds  of  each  class  last  dated  and  numbered,  of  the  time 
of  which  intended  payment  or  redemption  the  Secretary  of 
the  Treasury  shall  give  public  notice,  and  the  interest  on 
the  particular  bonds  so  selected  at  any  time  to  be  paid  shall 
cease  at  the  expiration  of  three  months  from  the  date  of 
such  notice. 


10 


THE  FUNDED  LOANS. 


[CHAP.  I. 


Interest  pnyablo 
quarterly. 


SEC.  4.  [Authorizes  the  Secretary  to  call  in  for  payment 
the  five-twenty  bonds.]  See  Chapter  V. 

SEC.  5.  [Provides  for  the  issue  of  coin  certificates  for  gold 
deposits.  Expired  ~by  limitation.'] 

SEC.  6.   [Relates  to  the  sinking  fund.']     See  Chapter  VI. 

Approved  July  14,  1870. 

undred  The  amount  of  bonds  which  may  be  issued  of  the  five  per 

Tent011  cent,  loan  is  increased  to  five  hundred  millions  dollars,  and 

the  interest  of  any  portion  of  the  bonds  of  the  funded  loans 
may  be  paid  quarter-annually,  by  the  following  act : 

AN  ACT  TO  AMEND  AN  ACT   ENTITLED   "AN  ACT    TO    AUTHORIZE    THE   KEFUNDINQ 
OF  THE  NATIONAL  DEBT." 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled, 

That  the  amount  of  bonds  authorized  by  the  act  approved 
July  fourteen,  eighteen  hundred  and  seventy,  entitled  "An 
act  to  authorize  the  refunding  of  the  national  debt,"  to  be 
issued,  bearing  five  per  centum  interest  per  annum,  be,  and 
the  same  is,  increased  to  five  hundred  millions  of  dollars, 
and  the  interest  of  any  portion  of  the  bonds  issued  under 
said  act,  or  this  act,  may,  at  the  discretion  of  the  Secretary 
of  the  Treasury,  be  made  payable  quarter-yearly :  Provided, 
hoivever,  That  this  act  shall  not  be  construed  to  authorize 
any  increase  of  the  total  amount  of  bonds  provided  for  by 
the  act  to  which  this  act  is  an  amendment. 

Approved  January  20,  1871. 

Under  these  acts  there  are  three  loans  called  "  FUNDED 
LOANS,"  from  the  object  of  the  law,  to  refund  the  national 
debt  at  a  lower  rate  of  interest,  differing  from  each  other 
only  in  the  rates  of  interest  and  in  the  times  after  which 
they  may  be  redeemed,  which  latter  difference  gives  to  each 
its  distinctive  title. 

The  "  FUNDED  LOAN  OF  1881"  is  redeemable  at  the  pleas 
ure  of  the  United  States  after  the  first  day  of  May,  A.  D. 
1881,  and  bears  interest  at  the  rate  of  five  per  cent,  per 
annum,  payable  quarterly. 

The  "  FUNDED  LOAN  OF  1886,"  provided  for  by  law  but  not 
yet  issued,  is  redeemable  at  the  pleasure  of  the  United  Staters 
after  the  first  day  of  May,  A.  D.  1886,  and  bears  interest 
at  the  rate  x)f  four  and  a  half  per  cent,  per  annum,  payable 
quarterly. 


Funded,  of  IS  SI, 
5  percent. 


—of  188G,  4^  per 
cent. 


CHAP.  L]  THE  FUNDED  LOANS.  1 1 

The  "  FUNDED  LOAN  OF  1901,"  provided  for  by  law  but  not  —on 901, 4  per 
yet  issued,  is  redeemable  at  the  pleasure  of  the  United  States  cent> 
after  the  first  day  of  May,  1901,  and  bears  interest  at  the 
rate  of  four  per  cent,  per  annum,  payable  quarterly. 

The  bonds  of  each  of  these  issues,  unlike  those  of  any  Payable  m  coin, 
other  loan  ever  issued  by  the  Government,  express  upon 
their  face,  in  accordance  with  the  requirements  of  the  law, 
applicable  to  these  bonds  alone,  that  the  principal  and  in 
terest  are  "  payable  in  coin  of  the  standard  value  of  the 
United  States,  July  14,  1870,"  the  date  of  the  passage  of 
the  act,  and  that  both  are  "exempt  from  payment  of  all  Exempt  from 
taxes  or  duties  of  the  United  States,  as  well  as  from  taxa-  taxation- 
tion  in  any  form  by  or  under  State,  municipal,  or  local 
authority." 

The  interest  is  payable  quarterly,  on  the  first  days  of  interest 
February,  May,  August,  and  November,  in  each  year;  and 
that  upon  registered  bonds  is  sent  by  checks  directly  to  the 
holders  of  the  bonds  at  any  post-office  address  designated 
by  them,  in  this  country  or  in  Europe.  Coupon  bonds  all 
bear  date  May  1,  1871,  and  both  the  coupon  and  registered 
bonds  are  designated  on  their  face  "  FUNDED  LOAN  OF  1881," 
or  "OF  1886,"  or  "OF  1901,"  with  the  rate  of  interest. 

Two  hundred  millions  dollars  of  the  five  per  cents, 
have  already  been  negotiated ;  but  as  yet  none  of  the  four 
per  cents,  and  four  and  a  half  per  cents,  have  been  issued. 

These  are  the  only  loans  now  offered  for  sale  by  the  Gov-  oniyioan  now  of- 
eminent.     All  others,  having  long  since  been  closed,  are 
being    reduced    as  rapidly  as  the    surplus    revenues,    the 
money  obtained  from  the  sale  of  the  new  bonds,  and  the 
coin  in  the  Treasury,  will  permit. 

The  reduction  of  the  public  debt  for  three  years  last  past 
has  been  at  the  rate  of  about  a  hundred  millions  dollars  a 
year ;  and  the  proceeds  of  the  sale  of  the  Funded  Loan,  which 
can  be  used  only  to  redeem  the  five-twenty  bonds  and  not  to 
increase  the  public  debt,  has  still  further  reduced  the  amount 
of  bonds  bearing  six  per  cent,  interest. 

The  bonds  are  all  printed  on  the  distinctive  paper  adopted  Bonds  are  print- 


fered  by  Govern 
ment. 


ed  on  distinctive 

supervision  of  the  Department,  as  described  in  Chapter  III. 


by  the  Secretary  of  the  Treasury,  and  manufactured  under  the 


CONSOLS. 


[CHAP.  I. 


The  denominations  are  $50,  $100,  $500,  $1,000,  $5,000, 
and  $10,000  coupon  and  registered  bonds,  and  $20,000  and 
$50,000  also  of  the  registered  bonds. 


Consols. 

Acts  of  authorizn- 

tion. 


Origin  of  the  ap 
plication  of  the 
name  of  CONSOLS, 
to. 


2,  3,  4. 

CONSOLS  OF  1865,  OF  1867,  AND  OF  1868; 

or 
FIVE-TWENTIES  OF  1865,  OF  1867,  AND  OF  1868. 

The  act  of  Congress  of  March  3,  1865,  (chapter  77,)  au 
thorized  the  Secretary  of  the  Treasury  to  borrow  on  the 
credit  of  the  United  States  any  sums  not  exceeding  in  the 
aggregate  six  hundred  millions  of  dollars,  and  to  issue 
therefor  bonds  or  treasury  notes,  the  bonds  to  be  in  denomi 
nation  not  less  than  fifty  dollars,  and  made  payable  at  any 
period  not  more  than  forty  years  from  date,  or  made  re 
deemable  and  payable,  as  aforesaid,  as  might  be  expressed 
upon  their  face,  with  interest  payable  semi-annually.  The 
act  provided  that  the  principal  or  interest,  or  both,  of  the 
bonds  and  treasury  notes  might  be  made  payable  in  coin, 
or  in  lawful  money  ;  that  the  rate  of  interest,  when  payable 
in  coin,  should  not  exceed  six  per  cent.,  and  that  the  rates 
and  character  of  interest  should  be  expressed  on  all  such 
bonds  or  treasury  notes. 

The  act  still  further  provided,  that  the  treasury  notes 
should  be  made  convertible  into  any  bonds  authorized  by 
the  act;  that  any  treasury  notes  or  other  obligations  bear 
ing  interest,  issued  under  any  act  of  Congress.,  might,  at  the 
discretion  of  the  Secretary  of  the  Treasury,  and  with  the 
consent  of  the  holder,  be  converted  into  any  description  of 
said  bonds;  and  that  the  bonds  so  authorized  should  not 
be  considered  a  part  of  said  six  hundred  millions.  This 
provision  for  conversion  was  extended  by  act  of  April  12, 
1866,  (chapter  39,)  so  that  the  Secretary  was  authorized  to 
receive  any  treasury  notes  or  other  obligations  issued  under 
any  act  of  Congress,  ivlietlier  bearing  interest  or  not,  in  ex 
change  for  any  description  of  said  bonds.  The  conversion 


CHAP.  I.]  FIVE-TWENTIES  1865.  13 

or  consolidation  of  other  outstanding  obligations  into  these 

loans  gave  to  them  the  titles  of  CONSOLS,  as  they  are  called 

in  the  Treasury  Department ;  hut  being  redeemable  at  the  Also  called  GV<^ 

pleasure  of  the  Government  after  five  years,  and  payable  in  i 

twenty  years  from  the  date  of  issue,  they  are  better  known 

in  the  market  as  FIVE-TWENTIES  of  the  different  years  of 

issue— 1865,  1867,  and  1868. 

Under  the  provisions  of  the  two  acts  above  mentioned, 
for  the  conversion  of  treasury  notes  and  other  obligations, 
these  issues  of  bonds  were  made  and  designated — 

CONSOLS  OF  1865,  OR  FIVE-TWENTIES  OP  1865,  which  bear  consols  of  i«& 
date  July  1,  1865,  became  redeemable  at  the  pleasure  of 
the   Government  after  July  1,  1870,  and  will  be  payable 
July  1,  1885.     The  amount  issued  was  §332,998,950. 

CONSOLS  OF  1867,  OR  FIVE-TWENTIES  OF  1867,  which  bear  -of  iso?. 
date  July  1, 1867,  became  redeemable  at  the  pleasure  of  the 
Government  after  July  1,  1872,  and  will  be  payable  July 
1,  1887.     The  amount  issued  was  $379,602,350. 

CONSOLS  OF  1868,  OR  FIVE-TWENTIES  OF  1868,  which  bear  -of  iscs 
date  July  1, 1868,  became  redeemable  at  the  pleasure  of  the 
Government  July  1, 1873,  and  will  be  payable  July  1,  1888. 
The  amount  issued  was  $42,539,350. 

The  bonds  of  these  loans  are  all  designated  on  their  face  Bonds,  how  do* 
with  the  words:   "CONSOLIDATED  DEBT,  ISSUED  UNDER  ACT  lgna1 
OF  CONGRESS  APPROVED  MARCH  SD,  1865;"  "REDEEMABLE 
AFTER  FIVE  AND  PAYABLE  TWENTY  YEARS  FROM  DATE  ;"  and 
"!N  GOD  is  OUR  TRUST." 

The  interest  is  at  the  rate  of  six  per  cent,  per  annum,    interest,  when 
payable  semi-annually,  January  1  and  July  1,  in  each  year.   Payable- 

Denominations:  $50,  $100,  $500,  and  $1.000  coupon  and  Denomination, 
registered  bonds,  and  also  |5,000  and  $10,000  registered. 

5. 

FIVE-TWENTIES  OF  1865. 

Of  the  six  hundred  millions  of  bonds  authorized  by  the  Five-twenties  of 
act  of  March  3,  1865,  chapter  77,  and  the  act  of  April  12, 
1866,  chapter  39,  (under  which  the  consols  were  issued  by 
conversion  of  other  obligations,)  there  were  sold  for  money 


11 


Title  of  loan. 


interest 


When  redeem- 
able  and  payable. 


Designated. 


FIVE-TWENTIES,  JUNE,  1864. 


[CHAP.  I. 


Five-twenties  of 
June,  1864. 


Bonds  Issued. 


Redeemable, 


Interest 


Designation  of 
bonds- 


and  issued,  $203,327,250,  entitled,  from  the  time  after  which 
they  might  be  redeemed  —  five  years  —  and  the  time  of  he- 
coming  payable  —  twenty  years  —  and  the  date  of  their  issue. 
c  <  FIVE-TWENTIES  OF  1865  .  "  Like  the  consols  they  hear  inter 
est  at  the  rate  of  six  per  cent,  per  annum,  and  are  redeem- 
able  at  the  pleasure  of  the  Government  after  five  years  and 
paya^e  in  twenty  years  from  date,  but  unlike  them,  bear 
date  November  1,  1865,  and  have  the  interest  payable  May 
1  and  November  1,  in  each  year.  They  are  designated  on 
their  face  by  the  words  '  c  REDEEMABLE  AFTER  FIVE,  AND  PAYABLE 

TWENTY  YEARS  FROM  DATE,  and  "ACT  OF  MARCH  3D,  1865." 

Denominations:  $50,  $100,  $500,  and  $1,000  coupon  and 
registered  bonds,  and  also  $5,000  and  $10,000  registered. 
For  more  full  explanations  of  the  provisions  of  the  acts 
under  which  this  loan  was  negotiated,  see  "Consols," 
page  12. 


6. 


FIVE-TWENTIES  OF  JUNE,  1864. 

The  act  of  June  30,  1864,  chapter  1*72,  authorized  the 
Secretary  of  the  Treasury  to  borrow,  from  time  to  time,  on 
the  credit  of  the  United  States,  four  hundred  millions  of 
dollars,  and  to  issue  therefor  coupon  or  registered  bonds, 
redeemable  at  the  pleasure  of  the  Government  after  any 
period  not  less  than  five  nor  more  than  thirty  years,  or,  if 
deemed  expedient,  made  payable  at  any  period  not  more 
than  forty  years  from  date,  and  bearing  interest,  in  coin,  at 
the  rate  of  six  per  cent,  per  annum,  payable  semi-anrmally. 

The  amount  issued  was  $125,561,300,  in  coupon  and 
registered  bonds,  of  $50,  $100,  $500,  and  $1,000,  and  also 
in  registered  bonds  of  $5,000  and  $10,000,  bearing  date 
November  1,  1864,  redeemable  at  the  pleasure  of  the  United 
States  after  the  31st  day  of  October,  1869,  and  payable  on 
the  1st  day  of  November,  1884,  with  interest  from  the  1st 
day  of  November,  1864,  inclusive,  payable  on  the  1st  day 
of  May  and  November  in  each  year. 

These  bonds  are  designated  on  their  face,,  "Six  PER  CENT. 

LOAN,  UNDER  ACT  OF  JUNE  30,  1864,"  and  "KEDEEMABLE  AFTEB 


TEN-FORTIES.  15 

FIVE,  AND  PAYABLE  TWENTY  YEARS  FROM  DATE."      The  loan  de-    Title  dloar. 

rives  its  title  from  the  time  after  which  it  might  be  re 
deemed — five  years — and  the  time  of  becoming  payable — 
twenty  years — with  the  month  and  year  of  the  act  of 
authorization. 

7. 
FIVE-TWENTIES  OF  MARCH,  1864. 

This  small  loan,  originally  of  $3,882,500,  was  issued  Act  of  authorize - 
under  the  same  act  as  the  ten-forty  loan,  approved  March  3, 
1864,  chapter  17",  of  that  year,  for  the  balance  of  the  two 
hundred  millions  not  taken  up  in  ten-forty  bonds.  The  act 
provided  that  the  bonds  should  bear  date  March  1, 1864,  or 
any  subsequent  period ;  should  be  redeemable  at  the  pleas 
ure  of  the  Government  after  any  period  not  less  than  five 
years,  and  payable  at  any  period  not  more  than  forty  years 
from  date,  in  coin,  and  of  such  denominations  as  might  be 
found  convenient,  riot  less  than  fifty  dollars,  bearing  inter 
est  not  exceeding  six  per  cent,  a  year,  payable  annually  on 
bonds  not  over  one  hundred  dollars,  and  semi-annually  on 
all  others,  in  coin. 

The  title  is  derived  from  the  time  after  which  they  might  Title  and  desig- 
be  redeemed — five  years — and  the  time  of  becoming  pay-  natlon' 
able — twenty  years — with  the  month  and  year  of  the  pas 
sage  of  the  act  of  authorization  ;  and  the  face  of  the  bonds 
bears  the   words,  "  REDEEMABLE  AFTER  FIVE,  AND  PAYABLE 

TWENTY  YEARS  FROM  DATE,"  and  "  ACT  OF  MARCH  3,  1864." 

There  are  no  coupon  bonds  of  this  issue.     The  registered  Bonds  uii  regis* 
bonds  are  made  redeemable  at  the  pleasure  of  the  United  Redeemable  and 
States  after  the  31st  day  of  October,  1869,  and  payable  on  payable, 
the  1st  day  of  November,  1884,  with  interest  at  six  per  cent,    interest. 
per  annum,  payable  semi-annually,  on  the  1st  days  of  May 
and  November  in  each  year.     Denominations;  $100,  $500, 
$1.000,  and  $5, 000. 

8. 
TEN-FORTIES, 

Issued  under  the  act  of  March  3,  1864, -chapter  17,.  as  Ten-forties, 
were  the  " five-twenties  of  March,  1864.'* 


16 


SIXES  OF  1881. 


[CHAP.  L 


Title, 


Designation. 


renomination. 


Redeemable  and 
payable. 

Interest. 


Amount 


It  is  the  only  loan  ever  issued  with  the  provision  that  it 
might  be  redeemed  in  ten,  and  made  payable  in  forty  years 
from  date,  and  takes  its  title  from  that  fact. 

The  bonds  are  designated  on  the  face  ' '  FIVE  PER  CENT.  LOAN, 
UNDER  ACT  OF  MARCH  SD,  1864,"  and  "REDEEMABLE  AFTER  TEN, 

PAYABLE  FORTY  YEARS  FftOM  DATE." 

They  are  of  the  denomination  of  $50,  $100,  $500,  and 
$1,000,  registered  and  coupon,  and  also  $5,000  and  $10,000 
registered,  and  are  made  redeemable  at  the  pleasure  of  the 
United  States  after  the  28th  day  of  February,  1874,  and 
payable  on  the  1st  day  of  March,  1904,  with  interest  at  five 
per  cent,  per  annum,  payable  on  the  1st  day  of  March  and 
September  in  each  year,  except  that  upon  the  $50  and  $100 
bonds  it  is  payable  annually  on  the  1st  day  of  March. 

The  whole  amount  issued  was  $196, 117", 3 00. 


*.ct  of  authoriza 
tion. 


Title. 


9. 

LOAN  OF  1863 ; 

or 
SIXES  OF  1881. 

The  act  of  March  3,  1863,  chapter  73,  section  1,  author 
ized  the  Secretary  of  the  Treasury  to  borrow  from  time  to 
time,  on  the  credit  of  the  United  States,  not  exceeding  nine 
hundred  millions  of  dollars,  and  to  issue  therefor  coupon  or 
registered  bonds,  payable  at  the  pleasure  of  the  Government 
after  such  periods  as  might  be  fixed  by  the  Secretary,  not 
less  than  ten  nor  more  than  forty  years  from  date,  in  coin, 
and  at  such  denominations,  not  less  than  fifty  dollars,  as  he 
might  deem  expedient,  bearing  interest,  in  coin,  at  the  rate 
of  six  per  cent,  per  annum,  payable  on  bonds  not  exceeding 
$100  annually,  and  on  all  others  semi-annually.  The  act  of 
June  30,  1864,  chapter  172,  limited  the  amount  to  be  issued 
to  seventy-five  millions,  then  already  advertised. 

The  title  of  this  loan  on  the  books  of  the  Treasury  De 
partment  is  c'LoAN  OF  1863,"  being  the  only  one  of  that 
year ;  but  as  the  bonds  bear  six  per  cent,  interest,  and  may 
be  redeemed  in  1881,  they  are  commonly  called  in  the  mar- 


CHAP.  I.]  FIVE-TWENTIES  OF  1862.  17 

ket  "  SIXES  OF  1881. ' '  There  are,  however,  two  other  loans, 
commonly  called,  also,  for  the  same  reason,  "  SIXES  OF 
1881,"  but  distinguished  by  the  years  of  their  respective 
issue. 

The  certificate  and  bonds  bear  on  the  face  this  designa-  Designation  of 
tion:  "  TREASURY  DEPARTMENT,  ACT  OP  MARCH  3o,  1863,"  by 
which  they  may  be  distinguished  from  other  sixes  of  1881. 

The  whole  seventy-five  millions  were  issued  in  registered  Bonds  issued. 
and  coupon  bonds  of  $50,  $100,  $500,  and  $1,000,  and  in 
'registered  also  of  $5,000  and  $10,000,  redeemable  after  the  Redeemable, 
30th  day  of  June,  1881,  with  interest  at  six  per  cent,  per  interest. 
annum,  payable  on  the  1st  days  of  January  and  July  in 
each  year,  and  are  still  outstanding. 


10. 
FIVE-TWENTIES  OF  1862. 

Section  2,  chapter  33,  of  the  act  of  February  25,  1862, 
authorized  the  Secretary  of  the  Treasury,  in  order  to  fund  eatlon- 
the  treasury  notes  and  floating  debt,  to  issue,  on  the  credit 
of  the  United  States,  coupon  or  registered  bonds,  in  sums 
not  less  than  $50,  to  an  amount  not  exceeding  $500,000,000, 
redeemable  at  the  pleasure  of  the  United  States  after  five 
years,  and  payable  twenty  years  from  date,  and  bearing  in 
terest  at  the  rate  of  six  per  cent,  per  annum,  payable  serni- 
annually. 

Subscription  books  were  opened  to  the  public  for  this  loan, 


and  upon  closing  the  same,  at  the  time  specified  in  the  ad-  tion  and 
vertisement,  it  was  found  that  $511,000,000  had  been  sub 
scribed  for.  Congress,  by  act  of  March  3,  1864,  chapter 
17,  section  2,  authorized  the  issue  of  that  amount,  and  by 
act  of  January  28,  1865,  chapter  22,  as  construed,  increased 
the  amount  authorized  $4,000,000  more,  making  in  all 
$515,000,000. 

There   were  actually  issued  $439,422,000    coupon,  and 
$75,349,600  registered  bonds. 

The  title  was  derived  from  the  time  after  which  the  bonds  T.fl 

J.  lilt?  HUU  CL&S 

might  be  redeemed  —  five  years  ;  the  time  when  payable  —  nation., 

2 


18 


FIVE-TWENTIES  OF  1862. 


[CHAP.  I. 


Interest. 


Scries. 
First. 


Third. 


Fourth. 


Denomination. 


Redemption. 


twenty  years ;  and  the  year  of  the  passage  of  the  first  act 
of  authorization — 1862. 

The  bonds  bear  on  their  face  the  designation,  " REDEEM 
ABLE  AFTER  FIVE  AND  PAYABLE  TWENTY  YEARS  FROM  DATE,"  and 

"LOAN  OF  FEBRUARY  25,  1862;"  and  are  made  redeemable 
at  the  pleasure  of  the  United  States  after  the  30th  day  of 
April,  1867;  and  payable  on  the  first  day  of  May,  1882, 
(except  the  first  series,  as  hereafter  explained,)  with  inter 
est  at  six  per  cent,  per  annum,  payable  on  the  first  days  of 
May  and  November  in  each  year. 

The  coupon  bonds  were  issued  in  four  series.  Those  of 
the  first,  amounting  to  one  hundred  millions  of  dollars,  are 
printed  in  green  tint,  and  have  no  designation  of  series  upon 
them.  They  are  made  payable  after,  instead  of  on,  the  1st 
day  of  May,  1882.  This  was  an  error  in  not  following  the 
language  of  the  law,  and  was  corrected  in  the  subsequent 
series. 

Those  of  the  second,  also  of  one  hundred  millions  of  dol 
lars,  are  printed  in  yellow  tint,  with  blue  numbering,  and 
have  the  words  " SECOND  SERIES,"  or  U2o  SERIES,"  stamped 
upon  them,  twice  on  the  bond  and  once  on  each  coupon. 

Those  of  the  third,  also  of  one  hundred  millions  of  dol 
lars,  are  printed  in  black,  with  blue  numbering,  and  have 
" THIRD  SERIES"  stamped  twice  on  the  bonds  and  once  on 
each  coupon. 

Those  of  the  fourth,  amounting  to  §139,422,000,  are 
printed  in  black,  with  red  numbering,  and  stamped  as 
" FOURTH  SERIES,"  or  "4TH,"  in  different  styles  and  forms. 

The  bonds  are  $50,  $100,  $500,  and  $1,000  coupon  and 
registered,  and  also  $5,000  and  $10,000  registered. 

Section  4  of  the  refunding  act  of  July  14,  1870,  (chapter 
256,)  authorizes  the  Secretary  of  the  Treasury  to  pay  at 
par  and  cancel  any  five-twenty  bonds'  after  becoming  re 
deemable,  indicating  and  specifying,  in  public  notices,  by 
class,  date,  and  number,  in  the  order  of  their  numbers  and 
issues,  beginning  with  the  first  numbered  and  issued,  and 
declares  that,  in  th^ee  months  after  the  date  of  such  public 
notice,  the  interest  on  the  bonds,  so  selected  and  advertised 
to  be  paid,  should  cease.  By  virtue  of  this  law  the  Secre- 


CHAP.  L]  FIVE-TWENTIES   OF   1862.  19 

tary  has  called  in  for  payment  the  following  designated  Bonds  called  in 
bonds,  and  has  given  notice  thereof: 

FIRST  CALL. — Notice  dated  September  1 , 1871 .  First  can. 

All  the  first  series  of  coupon  bonds  of — 

$50  numbered  1  to  30,699  inclusive. 
$100          "          1  to  43,572 
$500          "          1  to  40,011 
$1,000  1  to  74,104 

All  registered  bonds  of— 

$50  numbered  1  to       595  inclusive. 

$100         "         1  to  4,103 

$500         "         1  to  1,899 

$1,000         "         1  to  8,906 

$5,000          "          1  to  2,665 

$10,000         "         1  to  2,906 
Which  ceased  to  bear  interest  December  1,  1871. 

SECOND  CALL.—  Notice  dated  December  7, 1871  *  second  can. 

Of  the  second  series,  all  coupon  bonds  of — 

$50  numbered  1  to    5,460  inclusive. 
$100          "          1  to  13,093 
$500         "          1  to    7,964 
$1,000  1  to  11,120 

All  registered  bonds  of — 

$50  numbered     596  to       697  inclusive. 
$100  4,104  to    5,079 

$500          "          1,900  to    2,483 
$1,000         "         8,907  to  11,008 
§5,000         "         2,666  to    3,402 
$10,000  2,907  to    3,899 

Which  ceased  to  bear  interest  March  7, 1872. 

THIRD  CALL.— Notice  dated  December  20. 1871 .  Third  can. 

Of  the  second  series,  all  coupon  bonds  of — 

$50  numbered    5,461  to  10.775  inclusive. 
$100         "          13,094  to  25,935 
$500         "  7,965  to  16,179 

$1,000  11,121  to  27,443 

All  registered  bonds  of — 

$50  numbered       698  to       840  inclusive 
$100  5,080  to    5,.991 

$500          "  2,484  to    2,958 

$1,000          "          11,009  to  13,150 
$5,000  3,403  to    4.102 

$10,000  3,900  to    4,774 

Which  ceased  to  bear  interest  March  20,  1872. 

FOURTH  CALL.— -Notice  dated  March  1 , 1 873.  n-ourtn  ca.L 

Of  the  second  series,  all  coupon  bonds  of — 

$50  numbered  10,776  to  27,798  inclusive 
$100          "         25,936  to  66,646 
$500          "          16,180  to  41,373 
$1,000         "         27,444  to  71,259 


20 

Fourth  call. 


SIXES   OF  1881. 


Amount  paid. 


Ufgulutious  for 
paying  called 

bonds  and  cou 
pons. 


Of  the  third  series,  all  coupon  bonds  of- 

$50  numbered  1  to    1,200  inclusive. 

$100          "  1  to 

$500          "  1  to 

$1,000         "  1  to 


4,752 
3,000 
5,733 


All  registered  bonds  of— 


$50  num 
$100 

$500 
$1,000 
$5,000 
$10,000 

aered       841 
5,992 
2,959 
13,151 
4,103 
4,775 

to    1,233  mcl 

to    8,803 
to    5,360 
to  20,680 
to    6,402 
to    7,092 

asive. 

Which  cease  to  bear  interest  June  1,  1873. 

Besides  the  bonds  thus  called  in  for  redemption,  amount 
ing  to  about  $190,000.000,  much  of  this  loan  has  been  pur 
chased  at  the  monthly  purchases  in  New  York. 

For  regulations  of  the  Treasury  Department  as  to  paying 
bonds  called  in  for  redemption,  when  coupons  have  been 
detached  therefrom,  and  the  payment  of  coupons  thus  de 
tached,  sec  Chapter  V,  p.  75. 


Ar.ts  of  authori- 
j'.ation. 


11. 
LOAN  OF  JULY  AND  AUGUST,  1861 ; 

or 

SIXES  OF  1881. 

By  the  act  of  July  17,  1SG1,  chapter  5,  the  Secretary  of 
the  Treasury  was  authorized  to  borrow  on  the  credit  of  the 
United  States  a  sum  not  exceeding  $250,000,000,  and  to 
issue  bonds  therefor,  or  treasury  notes,  in  such  proportions 
as  he  might  deem  advisable,  the  bonds  to  bear  interest  not 
exceeding  six  per  cent,  per  annum,  payable  semi-annually, 
irredeemable  for  twenty  years,  and  after  that  period  redeem 
able  at  the  pleasure  of  the  United  States. 

This  law  was  amended  by  a  supplementary  act  of  August 
5,  1861,  chapter  46,  of  which  section  1  authorized  the  Sec 
retary  to  issue  bonds  bearing  interest  at  six  per  cent,  per 
annum,  and  payable  at  the  pleasure  of  the  United  States 
after  twenty  years  from  date,  but  no  such  bond  to  be  issued 
for  a  less  sum  than  five  hundred  dollars,  and  to  exchange  the 
same  for  treasury  notes  issued  under  the  former  act.  Section 
7  of  the  act  of  August  5  also  provided,  that  the  Secretary 


CHAP.  I.}  OREGON  WAR  DEBT.  21 

might  sell  or  negotiate,  for  any  portion  of  the  loan  provided 
for  by  the  act  of  July  17,  bonds  payable  not  more  than 
twenty  years  from  date,  and  bearing  interest  not  exceeding 
six  per  cent,  per  annum,  payable  semi-annually. 

There  was   issued   under   these  various   provisions  one  Bonds  issued 
loan,  by  sale  $50,000,000,  and  by  exchange  $139,321,200, 
in  bonds  redeemable  after  the  30th  day  of  June,  1881,  with 
interest  at  six  per  cent,  per  annum,  payable  on  the  1st  days  interest, 
of  January  and  July  in  each  year,  designated  on  the  face  Payabla 
of  each  bond,  "LOAN  OF  JULY  17,  AND  AUGUST  5,  1861,"   Designation  a-n* 
from  which  the  official  title  of  the  loan  was  derived.     The 
bonds  are  also  called  in  the  market,  "  SIXES  OF  1881,"  from 
the  rate  of  interest  and  time  of  payment. 

The  denominations  actually  issued  are  $50,  $100,  $500,   Denomination, 
and  $1,000  coupon  and  registered  bonds,  and  also  $5,000 
and  §10,000  registered.     The  whole  amount  of  the  original  Not  matured, 
loan  is  still  outstanding,  not  having  yet  matured. 

12. 
OREGON  WAR  DEBT. 

The  act  of  March  2,  1861,  chapter  70,  entitled  "An  act  Act  of  authorial 
to  provide  for  the  payment  of  expenses  incurred  by  the  Ter-  * 
ritories  of  Washington  and  Oregon  in  the  suppression  of 
Indian  hostilities  therein,  in  the  years  1855  and  1856," 
appropriated  so  much  money  as  might  be  necessary  for  the 
payment  of  specific  claims  therein  mentioned,  and  by  sec 
tion  4  authorized  the  Secretary  of  the  Treasury,  if  he 
deemed  it  expedient,  to  issue  to  the  claimants  bonds  of  the 
United  States  of  a  denomination  not  less  than  fifty  dollars, 
redeemable  in  twenty  years,  and  bearing  interest  at  the  rate 
of  six  per  cent,  per  annum,  with  coupons  attached,  and 
payable  annually  or  semi-annually,  at  the  discretion  of  the 
Secretary. 

Under  this  act  there  were  issued  $1,090,850,  all  in  cou-  Bonds  tamed: 
pon  bonds,  payable  at  any  time  after  the  first  day  of  July, 
1881,  to  a  payee  therein  named,  or  order,  in  denominations  Denomination 
of  $50  and  $100,  with  interest  at  six  per  cent.,  payable  interest 
annually,  July  1,  in  each  year,  and  of  $500,  with  interest 


22 


SIXES  OF  1881. 


Tiile  uiicl  desig 
nation. 

Bonds  payable  to 
order. 


Coupons. 


at  the  same  rate,  payable  semi-annually,  Januaiy  1  and 
July  1. 

The  bonds  arc  designated  on  the  face,  "  OREGON  WAR 
DEBT,"  and  the  loan  takes  its  title  from  that  fact. 

These  bonds,  unlike  any  other  coupon  bonds,  being  pay 
able  to  order,  do  not  pass  by  delivery,  but  only  by  assign 
ments,  duly  executed  in  like  manner  as  those  required  on 
registered  bonds,  by  the  payee  or  assignee  thereof.  The 
coupons  pass  by  delivery. 

Of  this  loan  $145,850  have  been  redeemed,  and  the  bal 
ance,  §945,000,  will  become  redeemable  July  1,  1881. 


Act  of  authoriza 
tion. 


Bonds  issued. 


interest. 


Payable. 


Title. 


13. 

LOAN  OF  FEBRUARY,  1861 ; 

or 
SIXES  OF  1881. 

By  the  act  of  February  8, 1861,  chapter  29,  the  President 
was  authorized,  at  any  time  before  the  1st  day  of  July  then 
next,  to  borrow,  on  the  credit  of  the  United  States,  a  sum 
not  exceeding  twenty-five  millions  of  dollars,  to  be  used  in 
the  payment  of  the  current  demands  upon  the  Treasury, 
and  for  the  redemption  of  treasury  notes  outstanding,  and 
to  issue  registered  or  coupon  certificates  of  stock  therefor,  in 
sums  not  less  than  one  thousand  dollars,  to  be  reimbursed 
within  a  period  not  beyond  twenty  years,  and  not  less  than 
ten  years,  with  interest  not  exceeding  six  per  cent,  per  an 
num,  payable  annually  or  semi-annually. 

There  were  issued  $18,415,000,  in  coupon  bonds  of  $1,000, 
and  registered  bonds  of  $1,000,  $5,000,  and  $10,000,  redeem 
able  AFTER,  or  at  any  time  after ,  the  31st  day  of  December, 
1880,  with  interest  at  six  per  cent,  per  annum,  payable 
semi-annually,  January  1  and  July  1,  in  each  year. 

The  whole  amount  is  still  outstanding,  and,  notwithstand 
ing  the  language  of  the  bonds,  is  payable  December  31, 
1880 — the  extreme  limit  of  time  allowed  by  the  act. 

The  title  of  the  loan  on  the  books  of  the  Department  is 
taken  from  the  act  of  authorization,  but  the  bonds  are  called 


CHAP.  L]  FIVES  OF  1874.  23 

in  the  market  "  SIXES  OF  1881,"  on  account  of  the  time  when 
they  are  supposed  to  become  payable — January  1,  1881. 
These  differ  from  the  other  Sixes  of  1881,  which  are  redeem 
able  after  June  30,  1881 ;  while  these  are  payable  December 
31,  1880. 

14. 

LOAN  OF  1858 ; 

or 
FIVES  OF  1874. 

The  President  was  authorized  by  act  of  Congress  approved  Acts  of  authorize 
June  14,  1858,  chapter  165,  at  any  time  within  twelve 
months  thereafter,  to  borrow,  on  the  credit  of  the  United 
States,  a  sum  not  exceeding  twenty  millions  of  dollars,  pro 
vided  no  contract  was  to  be  made  to  prevent  the  United 
States  from  reimbursing  the  same  at  any  time  after  fifteen 
years  from  the  1st  day  of  January  then  next.  The  stock 
was  required  to  be  issued  in  certificates  of  not  less  than 
$1,000  each,  bearing  interest  not  exceeding  five  per  centum 
per  annum,  payable  semi-annually,  with  interest  coupons 
attached.  By  section  6  of  the  act  of  March  3,  1859,  chap 
ter  82,  the  Secretary  of  the  Treasury  was  authorized  to  issue 
coupon  or  registered  stock,  as  the  purchaser  might  elect. 

The  loan  takes  its  title  from  the  year  of  the  passage  of  Title  and  desig- 
the  act,  and  the  bonds  are  designated  on  the  face  thereof  nation  of  bonda 
with  the  words  "  UNITED  STATES  LOAN  OF  1858."     They  are 
known  in  the  market  also  under  the  name  of  u  FIVES  OF 
1874,"  from  the  rate  of  interest  and  the  time  when  they 
are  supposed  to  become  payable. 

Twenty  millions  of  dollars  of  bonds  were  issued  in  denom-  Amount  issued. 
inations  of  $1,000,  with  coupons  attached,  and  $1,000  and 
$5.000  registered. 

The  language  of  the  coupon  bonds  is  that  the  "  United  coupon  bonds. 

States  will  pay  unto  -    -  or ,  the  sum  of ,  at  any 

time  after  the  1st  day  of  January,  18*74. "  *  *  "  Interest 
will  be  paid  thereon  at  the  rate  of  five  per  cent,  per  annum 
from  the  1st  day  of  January,,  1859,  payable  semi-annually, 
on  the  1st  day  of  January  and  July  of  each  year."  *  * 


24 


FIVES  OF  1874. 


[CHAP.  L 


Registered. 


Interest. 


The  oldest  loan. 


That  of  the  registered  stock  is  "  the  principal  of  which  is 
redeemahle  at  the  pleasure  of  the  United  States  at  any  time 
after  the  expiration  of  fifteen  years  after  the  1st  of  January, 
1859,  and  hearing  interest  at  the  rate  of  five  per  cent,  per 
annum,  payable  half  yearly."  The  times  of  payment  of 
interest  are  not  specified  in  the  registered  stock,  hut  are,  in 
fact,  the  same  as  on  the  coupon  bonds — January  1  and  July 
1  in  each  year. 

The  whole  loan  is  outstanding,  not  having  yet  matured, 
and  is  the  oldest  of  all  the  outstanding  loans  of  the  United 
States  not  called  in  for  redemption. 


CHAP.  II.]  DEBT  CEASED  TO  BEAK  INTEREST.  25 


CHAPTER  II. 


DEBT  WHICH  HAS  CEASED  TO  BEAR  INTEREST,  COIN  CERTIFI 
CATES,  CERTIFICATES  OF  DEPOSIT,  AND  DEBT  BEARING  INTER' 
EST  IN  CURRENCY. 


I.  Debt  which  has  ceased  to  bear  interest. 

2..  Coin  certificates,  or  gold  certificates. 

3.  Certificates  of  deposit. 

4..  Three  per  cent,  certificates. 


5.  Navy  pension  fund. 

6.  Certificates  of  indebtedness  of  1870. 

7.  Currency    sixes,    or    Pacific    Railway 

bonds. 


1. 

DEBT  WHICH  HAS  CEASED  TO  BEAU  INTEREST. 

Holders  of  Government  securities  are  slow  to  send  them  Balances  of  oia 
in  for  redemption  at  maturity,  even  after  interest  has  ceased  loan9- 
to  run  upon  them,  and  balances  of  loans  remain  many  years 
uncalled  for. 

Of  the  numerous  debts  matured  prior  to  the  year  1837 
there  are  still  outstanding  and  unclaimed  of  the  principal 
$57,665;  and  of  all  loans  heretofore  matured  the  amount 
which  had  not  been  presented  for  payment  September  1, 
1872,  was  $6,170,675  26. 

It  is  probable  that  some  part  of  the  bonds  and  other  evi 
dences  of  these  outstanding  balances  have  been  destroyed 
by  fire,  shipwreck,  and  otherwise;  and  by  reason  of  the 
death  of  the  owners,  or  other  causes,  all  knowledge  of  the 
existence  of  the  indebtedness  has  passed  away  from  those 
who  might  be  entitled  to  avail  themselves  of  the  claims. 

The  Government  sets  up  no  statute  of  limitations  against  NO  statute  of  iin> 
matured  bonds,  and  pays  those  which  have  been  destroyed,   *tation- 
upon  proof  of  destruction  and  ownership,  at  any  period  of 
time. 

Of  all  the  bonds  matured  and  all  issues  of  notes  and  cur-  NO  overissues, 
rency  called  in  for  redemption,  I  am  assured  by  those  who 
have  carefully  examined  the  books  of  the  Treasury  Depart- 


26  COIN  OR  GOLD  CERTIFICATES.          [CHAP.  II. 

ment  from  its  foundation,  that  in  no  case  has  there  been 
redeemed  or  presented  for  payment  any  more  than  the  books 
of  the  Government  show  to  have  been  properly  issued ;  and 
it  is  to  the  credit  of  the  Treasury  Department,  and  exhibits 
in  a  most  striking  manner  the  perfection  of  its  organization 
as  well  as  the  honesty,  integrity,  and  accuracy  of  its  officers 
and  employes,  under  all  administrations  for  a  period  of 
over  seventy-five  years,  that,  in  issuing  more  than  seven 
billions  of  dollars  in  securities  of  all  kinds,  including  bonds, 
certificates,  and  notes,  there  has  never  been  a  dollar  of 
fraudulent  over-issue. 

2. 
COIN  CERTIFICATES,  OR  GOLD  CERTIFICATES 

Are  authorized  by  the  following  section  of  the  act  of  the 
3d  of  March,  1863,  chapter  73 : 

SEC.  5.  And  be  it  further  enacted,  That  the  Secretary  of 
the  Treasury  is  hereby  authorized  to  receive  deposits  of  gold 
coin  and  bullion  with  the  Treasurer  or  any  Assistant  Treas 
urer  of  the  United  States,  in  sums  not  less  than  twenty 
dollars,  and  to  issue  certificates  therefor,  in  denominations 
of  not  less  than  twenty  dollars  each,  corresponding  with  the 
denominations  of  the  United  States  notes.  The  coin  and 
bullion  deposited  for  or  representing  the  certificates  of  de 
posit  shall  be  retained  in  the  Treasury  for  the  payment  of 
the  same  on  demand. 

And  certificates  representing  coin  in  the  Treasury  may 
be  issued  in  payment  of  interest  on  the  public  debt,  which 
certificates,  together  with  those  issued  for  coin  and  bullion 
deposited,  shall  not  at  any  tim-e  exceed  twenty  per  centum 
beyond  the  amount  of  coin  and  bullion  in  the  Treasury ; 
and  the  certificates  for  coin  or  bullion  in  the  Treasury  shall 
be  received  at  par  in  payment  for  duties  on  imports. 

Designations,  de-       These  certificates  are  now  designated  on  the  face  thereof 

nominations,  &c.    by  the  wordg  c^ERIES  OF  18H,"    "ACT  OF  MARCH  3,   1863," 

and  uGoLD  CERTIFICATES;"  are  in  denominations  of  §100, 
$500,  $1,000,  $5,000,  and  $10,000,  payable  at  the  office  of 
the  Assistant  Treasurer  at  New  York,  where  they  are  dated 
and  countersigned  by  him,  and  are  made  payable  to  the 
v:iiere issued, &c.  order  of  a  payee  therein  named.  They  are  all  issued  from 


CHAP.  II.]  CERTIFICATES  OF  DEPOSIT.  27 

the  Treasury  at  Washington  through  the  Assistant  Treas 
urer  at  New  York,  who,  upon  requisition,  supplies  them  to 
other  Assistant  Treasurers  and  to  Designated  .Depositaries, 
to  be  paid  out  to  parties  desiring  them  in  settlement  of  in 
terest  on  the  public  debt.  By  the  present  rules  of  the  De 
partment  they  are  exchangeable  for  coin,  and  redeemed  in 
coin  only  by  the  Assistant  Treasurers  at  New  York  and 
Boston.  They  are  receivable  for  duties  everywhere. 

Other  series  have  been  issued ;  some  of  those  of  1870  were  on  eerie* 
designated  "  GOLD  NOTES,"  and  an  earlier  series  still  had  the 
denomination  of  $20 ;  but  as  these  certificates  are  never 
reissued  when  once  redeemed  by  the  Treasurer  at  Wash 
ington,  all  except  those  of  the  series  of  1871  will  soon  dis 
appear  from  circulation. 

When  indorsed  in  blank  these  certificates  pass  by  delivery, 
and  to  some  extent  form  a  circulating  medium  of  gold  notes, 
especially  in  New  York  city,  where  the  large  gold  transac 
tions  in  the  payment  of  duties  and  other  business  render 
them  of  great  convenience. 

The  amount  that  may  be  issued  is  limited  only  by  the  Limit  of  tseuea 
wants  and  ability  of  the  business  community  and  the  re 
quirement  of  law  that  they  shall  not  at  any  time  exceed 
twenty  per  cent,  beyond  the  amount  of  coin  and  bullion  in 
the  Treasury. 

,    3. 

CEKTIFICATES  OF  DEPOSIT 

Are  issued  according  to  the  provisions  of  the  following 
act  of  Congress,  of  June  8,  1872,  chapter  346: 

AN  ACT    FOR  THE    BETTER    SECURITY   OF    BANK    RESERVES,  AND   TO    FACILITATE 
BANK  CLEARING-HOUSE  EXCHANGES. 

Be  it  enacted  by  tlie  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That  Won-, 
the  Secretary  of  the  Treasury  is  hereby  authorized  to  receive 
United  States  notes  on  deposit,  without  interest,  from  na 
tional  banking  associations,  in  sums  not  less  than  ten  thou* 
sand  dollars,  and  to  issue  certificates  therefor  in  such  form 
as  the  Secretary  may  prescribe^  in  denominations  of  not  less 
than  five  thousand  dollars ;  which  certificate  shall  be  pay* 


28  TEMPORARY  LOAN  CERTIFICATES.     [CHAP.  II. 

able  on  demand  in  United  States  notes  at  the  place  where 
the  deposits  were  made. 

SEC.  2.  That  the  United  States  notes  so  deposited  in  the 
Treasury  of  the  United  States  shall  not  be  counted  as  part 
of  the  legal  reserve ;  but  the  certificates  issued  therefor  may 
be  held  and  counted  by  national  banks  as  part  of  their  legal 
reserve,  and  may  be  accepted  in  the  settlement  of  clearing 
house  balances  at  the  places  where  the  deposits  therefor 
were  made. 

SEC.  3.  That  nothing  contained  in  this  act  shall  be  con 
strued  to  authorize  any  expansion  or  contraction  of  the 
currency ;  and  the  United  States  notes  for  which  such  cer 
tificates  are  issued,  or  other  United  States  notes  of  like 
amount,  shall  be  held  as  special  deposits  in  the  Treasury, 
and  used  only  for  the  redemption  of  such  certificates. 

Approved  June  8,  1872. 

Designation,  &<\  The  certificates  are  designated  on  the  face  thereof  with  the 
words  " CERTIFICATE  OF  DEPOSIT/'  " UNITED  STATES  NOTES," 
and  uAcT  OP  JUNE  8,  1872,  chapter  346,"  are  in  denomi 
nations  of  $5,000  and  $10,000,  are  signed  by  the  Treasurer 
and  Register  of  the  Treasury  and  countersigned  by  the 
Assistant  Treasurer  by  whom  they  are  issued,  and  are 
made  payable  to  the  order  of  a  payee  therein  named,  in 
United  States  notes,  on  demand,  at  the  office  of  the  Assist 
ant  Treasurer  where  they -are  countersigned  and  dated. 

4. 

THREE  PER  CENT.  CERTIFICATES  ; 

or 
TEMPORARY  LOAN  CERTIFICATES. 

Law  <ff  authorize  The  act  of  March  2,  1867,  (chapter  194,)  for  the  purpose 
of  redeeming  and  retiring  any  compound-interest  notes  out 
standing,  directed  the  Secretary  of  the  Treasury  to  issue 
temporary  loan  certificates,  bearing  interest  at  a  rate  not 
exceeding  three  per  cent,  per  annum ;  the  principal  and 
interest  payable  in  lawful  money  on  demand,  and  provided 
that  they  might  be  held  by  any  national  bank  as  a  part  of 
its  reserve  required  by  law,  to  the  extent  of  three-fifths  of 
Biich  reserve.  The  amount  to  be  issued  was  by  that  act 


CHAP.  II.]  NAVY  PENSION  FUND.  29 

limited  to  fifty  millions  of  dollars,  and  was  extended  to 
seventy-five  millions  of  dollars  by  the  act  of  July  25,  1868. 
The  whole  amount  actually  issued  has  been  about  eighty- 
four  millions  of  dollars,  but  not  over  seventy-five  millions 
at  any  one  time.  They  are  all,  or  nearly  all,  held  by  the 
banks,  and  the  interest  has  been  paid  upon  them  semi- 
annually. 

From  the  commencement  of  issuing  these  certificates  in  Gradual  rede:»i> 
payment  of  compound-interest  notes  they  have  been  can 
celed  as  fast  as  redeemed  by  the  Treasury  Department,  and 
never  reissued.  The  amount  outstanding  was  gradually 
reduced,  by  being  presented  for  payment  from  time  to  time, 
whenever  legal-tender  notes  were  needed  by  the  holders, 
until  it  was  less  than  forty-six  millions  of  dollars  on  the 
12th  of  July,  1870.  At  that  date  Congress  passed  an  act 
authorizing  the  increase  of  national  bank  circulation  to  the 
extent  of  fifty-four  millions  of  dollars,  and  requiring  the 
redemption  of  these  certificates  monthly  to  the  amount  of 
the  issue  of  new  bank  circulation  during  the  preceding 
months,  as  reported  to  the  Secretary  by  the  Comptroller  of 
the  Currency.  Under  the  operation  of  this  requirement 
the  three  per  cent,  certificates -are  being  called  in  for  pay 
ment,  and  will  soon  disappear  from  the  reports  of  the  out 
standing  debt,  except  such  as  may  remain  unclaimed  after 
interest  thereon  has  ceased  to  run. 

5. 

NAVY  PENSION  FUND. 

This  fund  arises  from  the  money  accruing  to  the  United  origin  and  object 
States  from  the  capture  of  prizes  authorized  by  law,  and  is  oi  the  fund, 
set  apart  for  the  payment  of  pensions  to  the  officers,  seamen, 
and  marines  who  may  be  entitled  to  receive  the  same,  and 
if  the  fund  is  insufficient  for  that  purpose,  the  public  faith 
is  pledged  to  make  up  the  deficiency. 

It  is  established  and  managed  under  the  following  laws: 
Act  of  April  23,  1800,  chapter  33,  sections  9  and  10,  (a  sub 
stitute  for  act  of  March  2,  1*799,  chapter  24;)  act  of  March 
26,  1804,  chapter  48;  act  of  April  16,  1816,  chapter  56; 


30  CERTIFICATES  OF  INDEBTEDNESS.    [CHAP.  II. 

resolution  of  July  1, 1864,  chapter  62  ;  act  of  July  23, 1868, 
chapter  229,  section  2;  and  act  of  July  20,  1868;  and  there 
are  many  acts  authorizing  payment  therefrom. 

The  fund  amounts  to  fourteen  millions  of  dollars,  for 
which  no  honds  have  been  issued,  and  of  which  no  evidence 
of  indebtedness  exists,  except  what  appears  in  the  laws  of 
Congress  and  the  books  of  the  Treasury  Department. 

It  would  hardly  be  called  a  debt,  were  it  not  included  in 
the  monthly  debt  statement  of  the  Department;  and  since 
the  passage  of  the  act  of  July  23,  1868,  providing  that  the 
interest  on  the  fund  shall  be  at  the  rate  of  three  per  cent, 
per  annum,  in  lawful  money,  and  applicable  exclusively  to 
the' payment  of  navy  pensions,  it  amounts  simply  to  a  per 
manent  appropriation  of  four  hundred  and  twenty  thousand 
dollars  a  year  to  the  payment  of  navy  pensions. 

6. 

CERTIFICATES  OF  INDEBTEDNESS  OF  18*70. 
.< 

Law  authorizing        The  act  of  July  8,  18*70,  chapter  229,  authorized  the  issue 
1S8UB'  of  certificates  of  indebtedness  of  the  denomination  of  $1,000 

each,  to  the  amount  of  $6*78,362  41,  payable  in  lawful  money 
of  the  United  States  in  five  years,  with  interest  semi-annu- 
ally  at  the  rate  of  four  per  cent,  per  annum,  two-thirds  to 
the  State  of  Massachusetts,  and  one-third  to  the  State  of 
Maine,  for  the  use  of  the  European  and  North  American 
Railway  Company  of  Maine,  to  aid  said  company  in  con 
structing  its  line  of  railway ;  each  of  said  States  having 
assigned  its  interest  therein  to  said  railway  company.  These 
bonds  were,  by  the  act,  to  be  in  "full  adjustment  and  pay 
ment  for  and  on  account  of  any  matters  arising  from  any 
money  expended  by  said  State  of  Massachusetts  on  account 
of  the  war  with  Great  Britain  in  1812  to  1815,  or  any  inter 
est  thereon,  or  on  account  of  any  matters  arising  out  of  or 
accruing  from  the  treaty  with  Great  Britain,  known  as  the 
treaty  of  Washington,  or  for  or  on  account  of  any  other 
matters  which  have  been  assigned  by  said  States  of  Massa 
chusetts  and  Maine  to  said  railway  company." 
Amount  issued.  There  were  issued  678  certificates  of  $1,000  each,  pay- 


CHAP.  II.]  PACIFIC  RAILWAY  BONDS.  31 

able  to  the  Treasurer  of  the  State  of  Maine  or  bearer, 
in  five  years  from  September  1,  1870,  with  semi-annual 
interest  coupons  of  twenty  dollars  each  attached,  both  pay 
able  in  lawful  money.  The  coupons  are  payable  March  1  —when  payable, 
and  September  1.  These  certificates  are  all  outstanding, 
and  will  become  payable  September  1, 1875.  For  the  bal 
ance,  $362  11,  one  other  certificate  was  issued,  and  has 
since  been  paid  and  canceled. 


CURRENCY  SIXES; 

or 
PACIFIC  RAILWAY  BONDS. 


Title,  den  -railna- 


These  bonds  are  commonly  known  as  "  CURRENCY  SIXES,  '  '   tions,  designs- 

'        lions,  £c. 

because  they  bear  six  per  cent,  interest,  and  are  the  only 
bonds  of  the  United  States  payable,  principal  and  interest, 
in  lawful  money.  On  the  public  debt  statement  and  the 
books  of  the  Treasury  Department  they  are  called  "  PACIFIC 
RAILWAY  BONDS,"  on  account  of  their  having  been  issued  to 
certain  Pacific  railroads  in  the  nature  of  a  loan,  underacts 
of  Congress  to  aid  in  the  construction  of  their  roads. 

They  are  all  registered,  in  denominations  of  $1,000,  $5,  000, 
and  §10,000;  are  payable  in  lawful  money  on  a  day  therein 
named,  which  is  at  the  expiration  of  thirty  years  from  the 
date  of  original  issue,  with  interest  at  six  per  cent,  per  an 
num,  payable  semi-annually,  on  the  1st  days  of  January 
and  July  in  each  year,  in  lawful  money  ;  and  are  designated 
with  the  words  "  [NAME  OF  COMPANY]  RAILROAD  COMPANY," 
"PAYABLE  THIRTY  YEARS  FROM  DATE,"  and  "Act  of  July  1st, 
1862,  Act  of  July  2d,  1864." 

The  name  of  a  railroad  company  is  thus  printed  on  the 
bonds  merely  to  indicate  to  which  company  they  were  issued,  united  states 

They  are  the  bonds  of  the  United  States,  containing  the 
absolute  unconditional  promise  of  the  national  Govern 
ment,  and  the  Government  alone  is  responsible  for  the  pay 
ment  of  both  principal  and  interest.  The  railroad  companies 


32 


PACIFIC  RAILWAY  BONDS. 


[CHAP.  IL 


Ponds  issued. 


Grants  hy  United 
States. 


are  under  no  obligations  to  the  holders  of  the  bonds,  but 
only  to  repay  the  United  States,  in  the  manner  set  forth  in 
the  acts  of  Congress. 

THE  FOLLOWING  TABLE  EXHIBITS  THE  NAMES  OF  THE  COMPANIES  TO  WHICH 
THE  BONDS  WEKE  ISSUED,  THE  AMOUNT,"  DATE  OF  ISSUE,  AND  TIMES  OF 
BECOMING  PAYABLE. 


Names  of   companies  to  which 
the  bonds  were  issued. 

Amount  is 
sued. 

Date  of  issue. 

Payable. 

Central  Pacific  

$2  362  000 

Jan'y  16   18G5 

Jan'y  16   1895, 

1  GOO  000 

Jan'y    1   1866. 

Jan'y    1    1896. 

•        :::::::::::::::::::: 

2,112,000 
10,614,120 
9  197  GOO 

Jan'y    1,  1867. 
Jan'y    1,  1868. 
Jan'y    1,  1869. 

Jan'y    1,  1897. 
Jan'y    1,  1898. 
Jan'y    1,  1899. 

Un  on  Pacific 

4  320  000 

Feb'y    1   1866 

Feb'y    1   1896 

3  840  000 

Jan'y    1    1867 

Jan'y    1,  1897 

, 

15  919  512 

Jan'y    1,  1868 

Jan'y    1    1898 

3  157000 

Jan'y    1   1869 

Jan'y    1   1899 

Central  Branch  Union  Pacific, 
late    Atchison    and    Pike's 
Peak  

640  000 

Jan'v    1   1866 

Jan'y    1   1896. 

640  000 

Jan'/    1   1867 

Jan'y    1   1897. 

Kansas,  late   Union    Pacific, 
Eastern  Division  

320,000 
640,000 

Jan'y    1,  1868. 
Nov'r    1,  1865 

Jan'y    1,  1898. 
Nov'r    1,  1895. 

»           « 

1  440  000 

Jan'y    1    1866 

Jan'y    1    1896 

<i 

2  800  000 

Jan'y    1    1867 

Jan'y    1    1897 

,.           u 

1  423  000 

Jan'y    1    1868 

Jan'y    1    1898 

Western  Pacific 

320  000 

Jan'y    1   1867 

Jan'y    1    1897 

1  650  560 

Jan'y    1    1869 

Jan'y    1    1899 

Sionx  City  and  Pacific 

1  628  320 

Jan'y    1   1868 

Jan'y    1    1898 

Security  for  re 
payment  of 
bonds. 


Interest  payable  January  1  and  July  1. 

These  bonds  were  issued  under  the  act  of  July  1,  1862, 
chapter  120,  and  the  act  of  July  2,  1864,  chapter  216,  as 
amended  by  some  subsequent  provisions. 

A  right  of  way  and  certain  public  lands  were  thereby 
granted  to  the  railroad  companies,  and  provisions  made  re 
quiring  trje  Secretary  of  the  Treasury  to  issue  the  bonds 
above  mentioned  to  said  companies,  upon  completing  sec 
tions  of  their  road,  at  the  rate  of  sixteen  thousand  dollars 
per  mile,  except  for  certain  parts  more  difficult  of  construc 
tion,  for  which  they  were  to  be  issued  at  the  rate  respectively 
of  thirty-two  thousand  and  forty-eight  thousand  dollars  per 
mile.  The  security  of  the  United  States  rests  upon  the 
following  provisions  of  law: 


CHAP.  II.] 


PACIFIC  RAILWAY  BONDS. 


ACT    OF  JULY  2,   1862,  CHAPTER    120. 

SEC.  5.  *  *  *  and  to  secure  the  repayment  to  the 
United  States,  as  hereinafter  provided,  of  the  amount  of 
said  bonds  so  issued  and  delivered  to  said  company,  together 
with  all  interest  thereon  which  shall  have  been  paid  by  the 
United  States,  the  issue  of  said  bonds  and  delivery  to  the 
company  shall  ipso  facto  constitute  a  first  mortgage  on  the 
whole  line  of  the  railroad  and  telegraph,  together  with  the 
rolling  stock,  fixtures,  and  property  of  every  kind  and  de 
scription,  and  in  consideration  of  which  said  bonds  may  be 
issued ; 

And  on  the  refusal  or  failure  of  the  said  company  to  re 
deem  said  bonds,  or  any  part  of  them,  when  required  so  to 
do  by  the  Secretary  of  the  Treasury,  in  accordance  with  the 
provisions  of  this  act,  the  said  road,  with  all  the  rights,, 
functions,  immunities,  and  appurtenances  thereunto  belong 
ing,  and  also  all  lands  granted  to  the  said  company  by  the 
United  States,  which,  at  the  time  of  said  default,  shall  re 
main  in  the  ownership  of  said  company,  may  be  taken  pos 
session  of  by  the  Secretary  of  the  Treasury,  for  the  use  and 
benefit  of  the  United  States:  Provided,  This  section  shall 
not  apply  to  that  part  of  any  road  now  constructed. 

SEC.  6.  And  be  it  further  enacted.  That  the  grants  afore 
said  are  made  upon  condition,  that  said  company  shall  pay 
said  bonds  at  maturity,  and  shall  keep  said  railroad  and 
telegraph  line  in  repair  and  use,  and  shall  at  all  times 
transmit  dispatches  over  said  telegraph  line,  and  transport 
mails,  troops,  and  munitions  of  war,  supplies,  and  public 
stores  upon  said  railroad  for  the  Government,  whenever  re 
quired  to  do  so  by  any  department  thereof,  and  that  the 
Government  shall  at  all  times  have  the  preference  in  the 
use  of  the  same  for  all  the  purposes  aforesaid,  (at  fair  and 
reasonable  rates  of  compensation,  not  to  exceed  the  amounts 
paid  by  private  parties  for  the  same  kind  of  service ;) 

And  all  compensation  for  services  rendered  for  the  Gov 
ernment  shall  be  applied  to  the  payment  of  said  bonds 
and  interest  until  the  whole  amount  is  fully  paid.  Said 
company  may  also  pay  the  United  States,  wholly  or  in 
part,  in  the  same  or  other  bonds,  treasury  notes,  or  other 
evidences  of  debt  against  the  United  States,  to  be  allowed 
at  par ; 

And  after  said  road  is  completed,  until  said  bonds  and 
interest  are  paid,  at  least  five  per  centum  of  the  net  earn 
ings  of  said  road  shall  also  be  annually  applied  to  the  pay 
ment  thereof. 


Mortgage. 


Road,  &c.,  to-be 
forfeited  on  fail 
ure  of  company 
to  redeem  bonds.. 


Grants  on  condi 
tion  that  compa 
nies  shall  pay 
bonds  at  rnati>     J 
ritv. 


Compensation  for 
services  to  U.  S. 
to  be  retained. 
Companies  may 
pay  in  treasury 
notes,  bonds,  &c. 


— after  ooruptp- 
tionofroadsSper 
cent,  of  net  earn 
ings  to  be  applied 
to  payment  of 
bonds. 


The  lien  of  the  United  States  is  made  subordinate  to  a  Government  u 
3 


4  PACIFIC  RAILWAY  BONDS.  [CHAP.  II 

1.1  mortgage  to    first  mortgage  authorized  by  the  provisions  of  the  act  of 


SE°'  10>  ^^  &e  ^  furtlier  enacted,  That  section  five  of 
said  act  be  so  modified  and  amended,  that  the  Union  Pacific 
Railroad  Company,  the  Central  Pacific  Railroad  Company, 
and  any  other  company  authorized  to  participate  in  the 
construction  of  said  road,  may,  on  the  completion  of  each 
section  of  said  road,  as  provided  in  this  act  and  the  act  of 
which  this  is  an  amendment,  issue  their  first  mortgage 
bonds  on  their  respective  railroads  and  telegraph  lines,  to 
an  amount  not  exceeding  the  amount  of  the  bonds  of  the 
United  States,,  and  of  even  tenor  and  date,  time  of  maturity, 
rate  and  character  of  interest  with  the  bonds  authorized  to 
be  issued  to  said  railroads  respectively. 

And  the  lien  of  the  United  States  bonds  shall  be  subordi 
nate  to  that  of  the  bonds  of  any  or  either  of  said  companies 
hereby  authorized  to  be  issued  on  their  respective  roads, 
property,  and  equipments,  except  as  to  the  provisions  of  the 
sixth  section  of  the  act  to  which  this  act  is  an  amendment, 
relating  to  the  transmission  of  dispatches  and  the  trans 
portation  of  mails,  troops,  munitions  of  war,  supplies,  and 
public  stores  for  the  Government  of  the  United  States. 

Section  5,  chapter  216,  act  of  July  2,  1864,  provides — 

only  hair  of  com.       That  only  one  half  of  the  compensation  for  services  ren- 
ensation  for ser-  (Jered   for   the   Government   by  said   companies   shall   be 
required  to  be  applied  to  the  payment  of  the  bonds  issued 
by  the  Government  in  aid  of  the  construction  of  said  road. 

And  the  act  of  March  3,  1871,  chapter  116— 

SEC.  9.  That,  in  accordance  with  the  fifth  section  of  the 
act  approved  July  two,  eighteen  hundred  and  sixty-four, 
entitled  "An  act  to  amend  an  act  entitled  'An  act  to  aid 
in  the  construction  of  a  railroad  and  telegraph  line  from 
the  Missouri  river  to  the  Pacific  ocean,  and  to  secure  to  the 
Government  the  use  of  the  same  for  postal,  military,  and 
other  purposes,'  approved  July  first,  eighteen  hundred  and 
sixty-two,"  the  Secretary  of  the  Treasury  is  hereby  directed 
to  pay  over  in  money  to  the  Pacific  Railroad  Companies 
mentioned  in  said  act,,  and  performing  services  for  the 
United  States,  one-half  of  the  compensation  at  the  rate  pro 
vided  by  law  for  such  services,  heretofore  or  hereafter  ren 
dered:  Provided,  That  this  section  shall  not  be  construed 
to  affect  the  legal  rights  of  the  Government  or  the  obliga 
tions  of  the  companies,  except  as  herein  specifically  pro 
vided. 


vices  to  U.S.  to  be 
retained. 


Balance  to  bo 
paid  to  com- 


CHAP,  III.] 


UNITED  STATES  NOTES. 


CHAPTER  III. 


UNITED  STATES  NOTES  AND  FRACTIONAL  CURRENCY;  DISTINCT-. 
IVE  PAPER  5  EXCHANGE  OF  MUTILATED  AND  DEFACED  NOTES, 
ETC. 


1.  United  States  notes. 

2.  Old  demand  notes. 

3.  Fractional  currency. 

<j..  Distinctive  paper  for  notes,  bonds,  &c. 


5.  Regulations  and  instructions  for  re 
demption  of  mutilated  and  deface.! 
currency. 


Acts  of  authnriza 
tion. 


1. 

UNITED  STATES  NOTES, 

Commonly  called  " LEGAL-TENDER  NOTES,"  from  being 
made  by  law  a  legal  tender  for  debts ;  and  "  GREENBACKS," 
from  the  green  color  in  which  the  backs  have  always  been 
printed.  They  are  issued  under  the  following  provisions 
of  law  : 

ACT  OF  FEBRUARY  25,  18G2,  CHAPTR  33,  SECTION  1. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled, 

That  the  Secretary  of  the  Treasury  is  hereby  authorized  First:let- 
to  issue,  on  the  credit  of  the  United  States,  one  hundred 
and  fifty  millions  of  dollars  of  United  States  notes,  riot 
bearing  interest,  payable  to  bearer,  at  the  Treasury  of  the 
United  States  and  of  such  denominations  as  he  may  deem 
expedient,  not  less  than  five  dollars  each  : 

Provided,  hoivever,  That  fifty  millions  of  said  notes  shall 
be  in  lieu  of  the  demand  treasury  notes  authorized  to  be 
issued  by  the  act  of  July  seventeen,  eighteen  hundred  and 
sixty-one;  which  said  demand  notes  shall  be  taken  up  as 
rapidly  as  practicable,  and  the  notes  herein  provided  for 
substituted  for  them :  And  provided,  further,  That  the 
amount  of  the  two  kinds  of  notes  together  shall  at  no  time 
exceed  the  sum  of  one  hundred  and  fifty  millions  of  dollars ; 

And  such  notes  herein  authorized  shall  be  receivable  in 
payment  of  all  taxes,  internal  duties,  excises,  debts,  and 
demands  of  every  kind  due  to  the  United  States,  except 
duties  on  imports,  and  of  all  claims  and 


demands  against 


36  UNITED  STATES  NOTES.  [CHAP.  Ill 

the  United  States  of  every  kind  whatsoever,  except  for  in 
terest  upon  bonds  and  notes,  which  shall  be  paid  in  coin, 
and  shall  also  be  lawful  money  and  a  legal  tender  in  pay 
ment  of  all  debts,  public  and  private,  within  the  United 
States,  except  duties  on  imports  and  interest  as  aforesaid. 
And  any  holders  of  said  United  States  notes,  depositing  any 
sum  not  less  than  fifty  dollars  or  some  multiple  of  fifty 
dollars,  with  the  Treasurer  of  the  United  States,  or  either 
of  the  Assistant  Treasurers,  shall  receive  in  exchange  there 
for  duplicate  certificates  of  deposit,  one  of  which  may  be 
transmitted  to  the  Secretary  of  the  Treasury,  who  shall 
thereupon  issue  to  the  holder  an  equal  amount  of  bonds  of 
the  United  States,  coupon  or  registered,  as  may  by  said 
holder  be  desired,  bearing  interest  at  the  rate  of  six  per 
centum  per  annum,  payable  semi-annual ly,  and  redeemable 
at  the  pleasure  of  the  United  States  after  five  years,  and 
payable  twenty  years  from  the  date  thereof. 

And  such  United  States  notes  shall  be  received  the  same 
as  coin,  at  their  par  value,  in  payment  for  any  loans  that 
may  be  hereafter  sold  or  negotiated  by  the  Secretary  of  the 
Treasury,  and  may  be  reissued  from  time  to  time,  as  the 
exigencies  of  the  public  interest  shall  require. 


ACT  OF  JULY  11,  1862,  CHAPTER  142. 

i  act  Be  it  enacted  ly  the  Senate  and  House  of  Representatives  of 

the  United  States  of  America  in  Congress  assembled, 

That  the  Secretary  of  the  Treasury  is  hereby  authorized 
to  issue,  in  addition  to  the  amounts  heretofore  authorized, 
on  the  credit  of  the  United  States,  one  hundred  and  fifty 
millions  of  dollars  of  United  States  notes,  not  bearing  inter 
est,  payable  to  bearer,  at  the  Treasury  of  the  United  States, 
and  of  such  denominations  as  he  may  deem  expedient : 

Provided,  That  no  note  shall  be  issued  for  the  fractional 
part  of  a  dollar,  and  not  more  than  thirty-five  millions  shall 
be  of  lower  denominations  than  five  dollars. 

And  such  notes  shall  be  receivable  in  payment  of  all  loans 
made  to  the  United  States,  and  of  all  taxes,,  internal  duties, 
excises,  debts,  and  demands  of  every  kind  due  to  the  United 
States,  except  duties  on  imports  and  interest,  and  of  all 
claims  and  demands  against  the  United  States,  except  for 
interest  upon  bonds, 'notes,  and  certificates  of  debt  or  de 
posit;  and  shall  also  be  lawful  money  and  a  legal  tender  in 
payment  of  all  debts,  public  and  private,  within  the  United 
States,  except  duties  on  imports  and  interest,  as  aforesaid. 

And  any  holder  of  said  United  States  notes,  depositing 
any  sum  not  less  than  fifty  dollars,  or  some  multiple  of 


CHAP.  III.]  UNITED  STATES  NOTES.  37 

fifty  dollars,  with  the  Treasurer  of  the  United  States,  or 
either  of  the  Assistant  Treasurers,  shall  receive  in  exchange 
therefor  duplicate  certificates  of  deposit,  one  of  which  may 
be  transmitted  to  the  Secretary  of  the  Treasury,  who  shall 
thereupon  issue  to  the  holder  an  equal  amount  of  bonds  of 
the  United  States,  coupon  or  registered,  as  may  by  said 
holder  he  desired,  hearing  interest  at  the  rate  of  six  per 
centum  per  annum,  payable  semi-annually,  and  redeemable 
at  the  pleasure  of  the  United  States  after  five  years,  and 
payable  twenty  years  from  the  date  thereof: 

Provided,  however,  That  any  notes  issued  under  this  act 
may  be  paid  in  coin,  instead  of  being  received  in  exchange 
for  certificates  of  deposit  as  above  specified,  at  the  direction 
of  the  Secretary  of  the  Treasury. 

And  the  Secretary  of  the  Treasury  may  exchange  for  such 
notes.,  on  such  terms  as  he  shall  think  most  beneficial  to  the 
public  interest,  any  bonds  of  the  United  States  bearing  six 
}>*•'•  wntum  interest,  and  redeemable  after  five  and  payable 
in  twenty  years,  which  have  been  or  may  be  lawfully  issued 
under  the  provisions  of  any  existing  act; 

May  reissue  the  notes  so  received  in  exchange;  may  re 
ceive  and  cancel  any  notes  heretofore  lawfully  issued  under 
any  act  of  Congress,  and  in  lieu  thereof  issue  an  equal 

amount  in  notes  such  as  are  authorized  by  this  act; 
******* 

SEC.  3.  ****** 
And  of  the  amounts  of  United  States  notes  authorized  by 
this  act,  not  less  than  fifty  millions  of  dollars  shall  be  re 
served  for  the  purpose  of  securing  prompt  payment  of  such 
deposits,  [temporary  loan  deposits  authorized  by  the  same  act^\ 
when  demanded,  and  shall  be  issued  and  used  only  when, 
in  the  judgment  of  the  Secretary  of  the  Treasury,  the  same 
or  any  part  thereof  may  be  needed  for  that  purpose.  *  * 

ACT  OP  MARCH  3,  1S63,  CHAPTER  73. 
******* 

SEC.  3.  And  be  it  farther  enacted,  That  the  Secretary  of  Third  *& 
the  Treasury  be,  and  he  is  hereby,  authorized,  if  required 
by  the  exigencies  of  the  public  service,  for  the  payment  of 
the  army  and  navy,  arid  other  creditors  of  the  Government, 
to  issue,  on  the  credit  of  the  United  States,  the  sum  of  one 
hundred  and  fifty  millions  of  dollars  of  United  States  notes, 
including  the  amount  of  such  notes  heretofore  authorized  by 
the  joint  resolution  approved  January  seventeen,  eighteen 
hundred  and  sixty-three,  in  such  form  as  lie  may  deem  ex 
pedient,  not  bearing  interest,  payable  to  bearer,  and  of  su.cn 
denominations,  not  less  than  one  dollar,  as  he  may  prescribe, 


33  UNITED  STATES  NOTES.  [CHAP.  III. 

which  notes  so  issued  shall  be  lawful  money  and  a  legal 
tender  in  payment  of  all  debts,  public  and  private,  within 
the  United  States,  except  for  duties  on  imports  and  interest 
on  the  public  debt ;  and  any  of  the  said  notes,  when  returned 
to  the  Treasury,  may  be  reissued  from  time  to  time  as  the 
exigencies  of  the  public  service  may  require. 

And  in  lieu  of  any  of  said  notes,  or  any  other  United  States 
notes,  returned  to  the  Treasury  and  canceled  or  destroyed, 
there  may  be  issued  equal  amounts  of  United  States  notes, 
such  as  are  authorized  by  this  act. 

;):  *  if  *  *  *  * 

And  the  holders  of  United  States  notes,  issued  under  and 
by  virtue  of  said  acts,  [of  February  25  and  July  11,  1862,] 
shall  present  the  same  for  the  purpose  of  exchanging  the 
same  for  bonds,  as  therein  provided.,  on  or  before  the  1st 
day  of  July,  eighteen  hundred  and  sixty-three,  and  there 
after  the  right  so  to  exchange  the  same  shall  cease  and 
determine. 

The  joint  resolution  referred  to  in  the  above  act  only 
authorized  the  issue  of  one  hundred  millions  of  dollars  of 
notes  in  advance  of  the  passage  of  that  act  then  pending 
before  Congress. 

Limit  of  issue.  These  three  acts  together  authorize  the  issue  of  four  hun 
dred  and  fifty  millions  of  dollars ;  but  the  construction  given 
by  the  Treasury  Department  is  that  the  fifty  millions  re 
quired  by  the  act  of  July  11,  1862,  (see  page  37,)  to  be 
reserved  for  the  payment  of  temporary  deposits  and  used 
only  when,  in  the  judgment  of  the  Secretary,  the  same,  or 
any  part  thereof,  might  be  necessary  for  that  purpose,  were 
intended  by  Congress  to  be  a  temporary  issue,  and  when 
once  withdrawn,  by  the  reduction  of  the  whole  to  four  hun 
dred  millions,  not  to  be  reissued.  This  construction  is  sus 
tained  by  the  Supreme  Court  in  the  case  of  "  The  Banks  v. 
The  Supervisors,  (7  Wallace,  26.)  The  Chief  Justice,  who 
was  Secretary  of  the  Treasury  at  the  time  of  the  passage  of 
the  acts,  therein  says:  "The  act  of  February  25,  1862,  pro 
vided  for  the  issue  of  these  notes  to  the  amount  of  one  hun 
dred  and  fifty  millions  of  dollars.  The  act  of  July  11,  1862, 
added  another  hundred  and  fifty  millions  of  dollars  to  the 
circulation,  reserving,  however,  fifty  millions  for  the  re 
demption  of  temporary  loan,  to  be  issued  and  used  only 
when  necessary  for  that  purpose.  Under  the  act  of  March 


CHAP.  III.]  UNITED  STATES  NOTES.  39 

3,  1863,  another  issue  of  one  hundred  and  fifty  millions  \vas 
authorized,  making  the  whole  amount  authorized  four  hun 
dred  and  fifty  millions,  and  contemplating  a  permanent 
circulation,  until  resumption  of  payment  in  coin,  of  four 
hundred  millions  of  dollars."  The  same  view  was  again 
expressed  by  the  Chief  Justice,  in  Veazie  Bank  v.  Fenno,  (8 
Wallace,  537.) 

The  amount  in  actual  circulation,  including  demand  notes,  Highest  amount 
reached  its  highest  point  about  August  31,  1865,  when  it  RpducMoM ^-c- 
was  $433,160,569.  At  the  time  of  the  proclamation  of  the 
President,  April  2,  1866,  declaring  the  rebellion  ended  in 
certain  States  therein  named,  it  was  §422,749,252.  It  was 
first  reduced  below  four  hundred  millions  of  dollars  Sep 
tember  1,  1866,  near  the  time  of  the  President's  proclama 
tion  of  August  20,  1866,  declaring  the  insurrection  at  an 
end  throughout  the  whole  of  the  United  States,  when  it 
was  $399,603,592,  and  has  never  been  so  high  since  that 
date. 

Congress  passed  the  act  of  April  12,  1866,  (chapter  39,)   Limiting reduc- 
providing  "that  of  United  States  notes  not  more  than  ten  tlon' 
millions  of  dollars  may  be  retired  and  canceled  within  six 
months  from  the  passage  of  this  act,  and  thereafter  not 
more  than  four  millions  of  dollars  in  any  one  month,"  and 
the  Secretary  of  the  Treasury  thereafter  continued  to  reduce 
the  amount  in  circulation. 

Afterwards  Congress  passed  the  following  act,  which  suspending  fur- 
became  a  law  without  the  approval  of  the  President  on  therreduction- 
the  4th  of  February,  1868: 

AN  ACT  TO  SUSPEND  FURTHER  REDUCTION  OF  THE  CURRENCY. 

Be  it  enacted  ly  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That 
from  and  after  the  passage  of  this  act,  the  authority  of  the 
Secretary  of  the  Treasury  to  make  any  reduction  of  the  cur 
rency,  by  retiring  or  canceling  United  States  notes,  shall 
be.  and  is  hereby,  suspended  ;  but  nothing  herein  contained 
shall  prevent  the  cancellation  and  destruction  of  mutilated 
United  States  notes,  and  the  replacing  the  same  with  notes 
Df  the  same  character  and  amount. 

At  this  time  the  amount  outstanding  was  three  hundred 


40 


UNITED  STATES  NOTES. 


[CHAP,  in, 


The  reserve  of 
forty-four  mil 
lions  of  notes. 


Redemption  of 
notes  in  coin. 


and  fifty-six  millions  of  dollars,  and  that  is  the  limit  below 
which  the  circulation  of  United  States  notes  cannot  be  re 
duced  without  congressional  enactment. 

Between  that  amount  and  the  four  hundred  millions 
authorized  by  law,  the  issue  of  the  reserve  of  forty-foil r 
millions  of  dollars  is  left  to  the  discretion  of  the  Secretary 
of  the  Treasury,  who  has  temporarily  issued  portions  of  it 
on  the  following  and  other  occasions  of  pressing  necessity: 

During  the  month  of  September,  1869,  about  a  million 
and  a  half  of  dollars  of  the  three  per  cent,  demand  certifi 
cates  came  in  suddenly  for  redemption,  arid  were  paid  out  of 
this  reserve;  but  the  amount  so  withdrawn  was  again  re 
stored  thereto  within  two  weeks ; 

In  the  great  Chicago  fire  of  1871  about  a  million  and  a 
half  of  dollars  in  notes  were  burned  and  entirely  destroyed 
in  the  office  of  the  depositary  at  that  place,  and  the  Sec 
retary  increased  the  apparent  circulation  by  that  amount 
from  the  reserve,  until,  by  the  seventh  section  of  the  act  of 
June  10,  1872,  chapter  415,  Congress  authorized  the  ac 
counting  officers  to  allow  a  credit  of  the  burned  notes  in 
the  accounts  of  the  depositary  and  in  the  books  of  the 
Department  when  the  amount  was  restored  to  the  re 
serve. 

The  obligation  of  the  Government  to  finally  redeem  all 
these  notes  in  coin  is  expressed  in  the  following  language 
of  the  Chief  Justice  of  the  Supreme  Court,  in  the  case  of 
The  Bank  v.  The  Supervisors,  (7  Wallace,  29,)  already  re 
ferred  to : 

"  Under  the  exigencies  of  the  times  it  seems  to  have  been 
thought  inexpedient  to  attempt  any  provision  for  the  re 
demption  of  the  United  States  notes  in  coin. 

"The  law-,  therefore,  directed  that  they  should  be  made 
payable  to  bearer  at  the  Treasury  of  the  United  States,  but 
did  not  provide  for  payment  on  demand.  The  period  of  pay 
ment  was  left  to  be  determined  by  the  public  exigencies. ' '  *  * 
''Every  one  of  them  expresses  upon  its  face  an  engagement 
of  the  nation  to  pay  the  bearer  a  certain  sum.  The  dollar 
note  is  an  engagement  to  pay  a  dollar,  and  the  dollar  in 
tended  is  the  coined  dollar  of  the  United  States ;  a  certain 
quantity  in  weight  and  fineness  of  gold  or  silver,  authenti 
cated  as  such  by  the  stamp  of  the  Government.  ISTo  other 


CHAP.  Ill]  UNITED  STATES  NOTES.  4] 

dollars  had  before  been  recognized  by  the  legislation  of  the 
national  Government  as  lawful  money." 

Until  the  year  1870  it  was  a  mooted  question  whether  constitutionality 
the  provisions  of  law  making  United  States  notes  a  legal  provfsVnT1" 
tender  for  debts  public  and  private  were  constitutional  or 
not.  Their  constitutionality  was  sustained  by  the  decisions 
of  several  State  courts  of  different  States ;  but,  as  to  debts 
contracted  before  the  passage  of  the  laws,  it  was,  in  1869,  held 
otherwise  by  the  Supreme  Court  of  the  United  States,  in 
Hepburn  v.  Griswold,  (8  Wallace,  603.)  At  that  time  two 
vacancies  existed  on  the  bench  of  that  court,  and  the  decis 
ion  was  not  regarded  throughout  the  country  as  conclusive 
upon  the  point  raised.  The  question  was  again,  in  1870, 
brought  before  the  fall  court,  consisting  of  nine  judges,  in 
the  two  cases  of  Knox  v.  Lee  and  Parker  v.  Davis,  (12  Wal 
lace,  457,)  heard  together,  was  elaborately  argued,  and  the 
constitutionality  of  the  law  fully  sustained  by  a  majority  of 
the  court — four  judges  dissenting. 

Mr.  Justice  Strong,  in  delivering  the  opinion  of  the  court,  -finally  Ketut-d. 
says:  "It  will  be  seen  that  we  hold  the  acts  of  Congress 
constitutional  as  applied  to  contracts  made  either  before  or 
after  their  passage.  In  so  holding,  we  overrule  so  much  of 
what  was  decided  in  Hepburn  v.  Griswold  as  ruled  the  acts 
unwarranted  by  the  constitution  so  far  as  they  apply  to 
contracts  made  before  their  enactment.  That  case  was  de 
cided  by  a  divided  court,  and  by  a  court  having  a  less  num 
ber  of  judges  than  the  law  then  in  existence  provided  this 
court  shall  have.  These  cases  have  been  heard  before  a  full 
court,  and  they  have  received  our  most  careful  consideration." 

It  may  therefore  be  considered  as  finally  settled,  by  the 
authoritative  decision  of  the  court  of  last  resort,  the  Supreme 
Court  of  the  United  States,  that  the  legal-tender  acts,  as 
they  are  commonly  called,  making  United  States  notes  a 
legal  tender  for  debts,  public  and  private,  are  constitutional 
and  valid. 

As  to  what  are  "debts  "  within  the  meaning  of  the  legal-  For  what  debt* 
tender  acts,  and  what  debts  may  or  may  not  be  discharged  Unitedstates 

J  noten  are  not  10- 

by  a  tender  of  United  States  notes,  there  has  been  some  con-  gai  tenders. 
flict  of  authorities  in  the  different  courts,  the  State  courts 


UNITED  STATES  NOTES. 


[CHAP.  III. 


Different  Issues. 


Exchangeable 
for  bonds. 


generally  going  further  than  the  Supreme  Court  of  the  Uni 
ted  States  in  sustaining  the  application  of  the  law.  The 
following  principles  may  be  taken  as  now  well  established : 

United  States  notes  are  not  a  legal  tender  for  taxes  im 
posed  under  State  authority,  unless  made  so  by  the  laws  of 
the  State,  {Lane  v.  Oregon,  7  Wallace,  71 ;)  nor  in  payment 
of  a  promissory  note  expressly  payable  by  its  terms  in  coin, 
(Villiac  v.Biven,  28  Col.,  410;)  nor  in  discharge  of  a  bond 
to  pay  a  certain  sum  in  gold  and  silver  coin,  (Bronson  v. 
Bodes,  7  Wallace,  229;)  nor  in  payment  of  the  annual  rent 
reserved  by  a  lease  made  in  1791  in  the  words,  " Fifteen 
pounds  current  money  of  Maryland,  payable  in  English 
golden  guineas,  weighing  five  pennyweights  and  six  grains, 
at  thirty-five  shillings  each,  and  other  gold  and  silver  at 
their  present  established  weight  and  rate,  according  to  act 
of  Assembly,"  (Butler  v.Homvitz,  7  Wallace,  258;)  nor  in 
discharge  of  any  contract  made  payable  in  specie  or  in  com 
modities  or  obligations  of  any  kind,  but  only  for  debts 
which  are  payable  in  money  generally,  (Trebilcock  v.  Wil 
son  et  ux.,  12  Wallace,  687  ;)  nor  in  satisfaction  of  an  award 
against  the  United  States,  made  payable  in  coin  by  the 
terms  of  the  award,  (Tyers  v.  United  States,  5  Court  of 
Claims  Beports,  509.) 

Under  the  three  acts  authorizing  the  issue  of  legal-tender 
notes,  four  different  issues  have  been  made.  The  first  two 
differed  from  each  other  only  slightly  in  the  style  and  lan 
guage  of  the  notes.  Those  .of  the  first  were  dated  March 
10,  1862,  and  bore  on  the  face  the  words,  "  Act  of  Febru 
ary  25th,  1862."  Those  of  the  second  were  dated  August  1, 
1862,  and  bore  on  the  face  the  words,  "Act  of  July  11, 
1862;"  of  this  issue  there  were  notes  of  the  denominations 
of  one  dollar  and  two  dollars,  which  were  prohibited  by 
the  first,  but  allowed  by  the  second  act. 

All  these  notes,  of  both  issues,  had  printed  upon  the 
backs  thereof  the  declaration  contained  in  the  laws  author 
izing  them,  that  they  were  "  exchangeable  for  United  States 
six  per  cent,  twenty-year  bonds,  redeemable  at  the  pleasure 
of  the  United  States  after  five  years."  This  right  to  ex 
change  notes  for  five-twenty  bonds  was,  by  the  third  section 


ua*>..  III.J  UNITED  STATES  NOTES.  43 

of  the  act  of  March  3,  1863,  chapter  73,  limited  to  July  1, 
1863,  after  which  it  ceased  and  determined.     (See  page  38.) 

The  next  issue  was  under  the  act  of  1863.  The  notes  Next  issue, 
were  dated  March  10,  1863,  bore  on  the  face  thereof  the 
words,  "  Act  of  March  3d,  1863,"  and  on  the  back,  like  those 
of  the  former  issues,  the  words.  "This  note  is  a  legal  tender 
for  all  debts  public  and  private,  except  duties  on  imports 
and  interest  on  the  public  debt,"  but  omitted  the  declara 
tion  that  they  were  exchangeable  for  five- twenty  bonds. 
In  other  respects  they  did  not  much  differ  from  the  earlier 
printed  notes. 

The  latest  issue  is  that  of  the  series  of  1869,  now  most  Latest  issue, 
in  circulation.  All  others  are  being  redeemed  as  rapidly 
as  possible,  and  are  never  reissued  when  once  paid  into  the 
Treasury.  Each  note  of  this  series  has  upon  its  face  the 
words,  "  March  3d,  1863,'"  and,  unlike  those  of  any  other 
issue,  the  words,  fk  TREASURY  NOTE,"  and,  except  the  $1,000 
note,  "Series  of  1869."  They  differ  from  the  others  also 
in  general  style,  in  the  details  of  engraving,  in  the  tinting, 
and  otherwise,  besides  being  printed  on  the  distinctive  pa 
per  designated  by  the  Secretary  of  the  Treasury,  and  made 
under  the  supervision  of  the  Treasury  Department. 

2. 
OLD  DEMAND  NOTES. 

The  act  of  July  IT,  1861,  chapter'5,  authorized  the  issue  Laws  relating  to, 
of  treasury  notes,  of  denominations  less  than  $50  and  not 
less  than  $10,  not  bearing  interest,  payable  on  demand 
by  the  Assistant  Treasurers  of  the  United  States  at  Phila 
delphia,  New  York,  and  Boston,  not  exceeding  fifty  millions 
in  all.  By  section  six  the  authority  to  issue  and  reissue 
these  notes  was  limited,  to  cease  and  determine  December 
31,  1862.  The  amount  to  be  issued  was  increased  to  sixty 
millions  of  dollars  by  the  act  of  February  12,  1862.  The 
act  of  August  5,  1861,  permitted  notes  to  be  in  denomina 
tions  not  less  than  $5,  added  the  assistant  treasury  at  Saint 
Louis  and  the  depository  at  Cincinnati  as  places  of  redemp 
tion,  and  provided  that  the  notes  should  be  "receivable  in 


44 


FRACTIONAL  CURRENCY. 


[CHAP.  III. 


Descriptioo  of 

n  otes. 


Payable  on  de 
mand  in  gold. 


payment  of  all  public  dues."  The  act  of  March  17,  1862, 
chapte  *  45,  further  provided,  that  in  addition  to  being  receiv 
able  in  payment  of  duties  on  imports,  they  should  be  receiv 
able,  and  should  be  lawful  money  and  a  legal  tender,  in  like 
manner  and  for  the  same  purposes  and  to  the  same  extent,  as 
the  notes  authorized  by  the  act  of  February  25, 1862.  Sixty 
millions  of  dollars  of  these  notes  were  issued,  but  none 
have  been  reissued  since  December  31,  1862;  and  all  that 
are  received  into  the  Treasury  are  canceled  and  destroyed. 
Less  than  a  hundred  thousand  dollars  remain  outstand 
ing,  and  these,  or  all  that  are  in  existence,  will  soon  be 
redeemed. 

They  were  dated  August  10,  1861,  were  made  payable  on 
demand  by  the  Assistant  Treasurer  at  New  York,  and  were 
stamped  on  the  face  with  the  words,  "Aci  or  JULY  17th, 
1861,"  and  " RECEIVABLE  IN  PAYMENT  OF  ALL  PUBLIC  DUES." 
These  are  the  notes  referred  to  in  the  law  establishing  the 
sinking  fund,  act  of  February  25,  1862,  chapter  33,  section 
5,  as  receivable  in  payment  of  duties  on  imports,  and  are 
the  only  notes  issued  during  the  Rebellion,  or  since  its  close, 
payable  on  demand  and  receivable  for  duties.  They  are 
treated  as  gold  notes,  and  are  redeemed  in  coin  whenever 
presented  for  payment. 


Origin  of  frac 
tional  currency. 


Acts  of  authoriza 
tion. 


3. 


FRACTIONAL  CURRENCY. 

The  suspension  of  specie  payments  by  the  banks  in  De 
cember,  1861,  was  followed  by  the  withdrawal  of  specie, 
gold,  silver,  and  even  copper  coinage,  from  circulation,  and 
the  difficulties  of  making  payments  of  small  sums  became 
so  great,  that  the  people  were  driven  to  the  necessity  of 
using  postage  stamps,  revenue  stamps,  and  the  checks  and 
memoranda  of  individuals  and  corporations,  issued  for  that 
purpose,  as  a  circulating  medium  for  small  change. 

In  order  to  afford  relief  to  the  public  from  this  great  in 
convenience,  Congress  passed  the  following  acts,  which  are 
still  in  force,  and  under  which  the  fractional  currency  ia 
now  issued : 


CHAP.  III.]  FRACTIONAL  CURRENCY.  45 

ACT  OF  JULY  17,  1862,  CHAPTER  196 

&N  ACT  TO  AUTHORIZE  PAYMENTS  IX  STAMPS,  AND  TO  PROHIBIT  CIRCULATION  OF 
NOTES  OF  LESS  DENOMINATION  THAN  ONE  DOLLAPv. 

Be  it  enacted  ~by  the  Senate  and  House  of  Representatives 
:f  the  United  States  of  America  in  Congress  assembled, 

That  the  Secretary  of  the  Treasury  be,  and  he  is  hereby,  First  act. 
directed  to  furnish  to  the  Assistant  Treasurers,  and  such 
designated  depositaries  of  the  United  States  as  may  be  by 
him  selected,  in  such  sums  as  lie  may  deem  expedient,  the 
postage  and  other  stamps  of  the  United  States,  to  be  ex 
changed  by  them,  on  application,  for  United  States  notes; 
and  from  and  after  the  1st  clay  of  August  next  such  stamps 
shall  be  receivable  in  payment  of  all  dues  to  the  United 
States  less  than  five  dollars,  and  shall  be  received  in  ex 
change  for  United  States  notes  when  presented  to  any 
Assistant  Treasurer  or  any  designated  depositary  selected 
as  aforesaid  in  sums  not  less  than  five  dollars. 

SEC.  2.  And  be  it  further  enacted, 

That  from  and  after  the  first  day  of  August,  eighteen   Penalty  for  circu- 
hundred  and   sixty-two,  no   private  corporation,  banking   iating,&c., other 
association,  firm,  or  individual  shall  make,  issue,  circulate,,   rencv 
or  pay  any  note,  check,  memorandum,  token,  or  other  obli 
gation,  for  a  less  sum  than  one  dollar,  intended  to  circulate 
as  money  or  to  be  received  or  used  in  lieu  of  lawful  money 
of  the  United  States;  and  every  person  so  offending  shall, 
on  conviction  thereof  in  any  district  or  circuit  court  of  the 
United  States,  be  punished  by  fine  not  exceeding  five  hun 
dred  dollars,  or  by  imprisonment  not  exceeding  six  months, 
or  by  both,  at  the  option  of  the  court. 

Approved  July  17, 1862. 

ACT  OF  MARCH  3,  1863,  CHAPTER  73. 

SEC.  4.  And  be  it  further  enacted,  That  in  lieu  of  postage  second  act 
and  revenue  stamps  for  fractional  currency,  and  of  fractional 
notes,,  commonly  called  postage  currenc}",  issued  or  to  be 
issued,  the  Secretary  of  the  Treasury  may  issue  fractional 
notes  of  like  amounts,  in  such  form  as  he  may  deem  expe 
dient,  and  may  provide  for  the  engraving,  preparation,  and 
issue  thereof  in  the  Treasury  Department  building.  And 
all  such  notes  issued  shall  be  exchangeable  by  the  Assistant 
Treasurers  and  designated  depositaries  for  United  States 
notes,  in  sums  not  less  than  three  dollars,  and  shall  be  re 
ceivable  for  postage  and  revenue  stamps,  and  also  in  pay 
ment  of  any  clues  to  the  United  States  less  than  five  dollars, 
except  duties  on  imports,  and  shall  be  redeemed  on  present 
ation  at  the  Treasury  of  the  United  States  in  such  sums 


FRACTIONAL  CURRENCY. 


[CHAP.  HI. 


Limited  to  fifty 
millions  dollars 


Third  act 


Whole  amoiint 
not  to  exceed 
fifty  millions  of 
dollars. 


Postage  cur 
rency. 


and  under  such  regulations  as  the  Secretary  of  the  Treasury 
shall  prescribe  :  Provided,  That  the  whole  amount  of  frac 
tional  currency  issued, including  postage  and  revenue  stamps 
issued  as  currency,  shall  not  exceed  fifty  millions  of  dollars. 

ACT  OF  JUNE  30,  1864,  CHAPTER  172. 

SEC.  5.  And  be  it  further  enacted,  That  the  Secretary  of 
the  Treasury  may  issue  notes  of  the  fractions  of  a  dollar  as 
now  used  for  currency,  in  such  form,  with  such  inscriptions, 
and  with  such  safeguards  against  counterfeiting,  as  he  may 
judge  best,  and  provide  for  the  engraving  and  preparation, 
and  for  the  issue  of  the  same,  as  well  as  of  all  other  notes  and 
bonds  and  other  obligations,  and  shall  make  such  regula 
tions  for  the  redemption  of  said  fractional  notes  and  other 
notes  when  mutilated  or  defaced,  and  for  the  receipt  of  said 
fractional  notes  in  payment  of  debts  to  the  United  States, 
except  for  customs,  in  such  sums,  not  over  five  dollars,  as 
may  appear  to  him  expedient;  and  it  is  hereby  declared 
that  all  laws  and  parts  of  laws  applicable  to  the  fractional 
notes  engraved  and  issued  as  herein  authorized  apply 
equally  and  with  like  force  to  all  the  fractional  notes  here 
tofore  authorized,  whether  known  as  postage  currency  or 
otherwise,  and  to  postage  stamps  issued  as  currency;  but 
the  whole  amount  of  all  descriptions  of  notes  or  stamps  less 
than  one  dollar  issued  as  currency  shall  not  exceed  fifty 
millions  of  dollars. 

On  the  21st  of  August,  1862,  the  Treasury  Department 
began  to  issue  the  first  notes  of  denominations  less  than  $1, 
under  the  act  of  July  17  of  that  year.  They  bore  upon  the 
face  thereof  the  words  " POSTAGE  CURRENCY,"  and  "Receiv- 
able  for  postage  stamps  at  any  post  office,"  with  fac  similes 
of  the  designs  of  postage  stamps.  The  5-cent  note  had 
the  print  of  a  five-cent  postage  stamp,  and  the  10-cent  note 
a  ten-cent  postage  stamp.  The  25-cent  note  had  five  five- 
cent  postage  stamps,  and  the  50-cent  note  five  ten-cent 
postage  stamps.  This  currency  was  used  during  the  most 
excited  and  disturbed  times  of  the  Rebellion,  and  much 
of  it  was  undoubtedly  destroyed  in  the  hands  of  holders, 
and  will  never  come  in  for  redemption.  None  of  it  has 
been  reissued  for  many  years,  and  the  Department  has 
made  great  efforts  to  withdraw  it  from  circulation ;  but  there 
are  more  than  four  millions  of  dollars  still  outstanding — 
a  much  larger  amount  than  of  either  of  the  next  two  issues. 


CHAP.  III.]  FRACTIONAL  CURRENCY.  4  *J 

Since  the  passage  of  the  acts  of  March  3,  1863,  and  June  Fractional  cnr* 
30,  1864,  several  other  issues  or  series  have  "been  made 
and  designated  "  FRACTIONAL  CURRENCY,"  the  notes  differ 
ing  from  those  of  all  former  issues  in  color,  design,  and 
paper. 

The  denominations  which  have  been  issued  are  3  cents,  Denominations. 
Scents,  10  cents,  15  cents,  25  cents,  and  50  cents.  The 
"postage  currency"  had  no  3-cent  note,  that  denomination 
being  first  introduced  under  the  act  of  1863.  The  act  of 
March  3,  1865,  chapter  100,  section  3,  prohibited  the  issue 
of  fractional  notes  of  a  less  denomination  than  five  cents, 
and  required  those  outstanding  to  be  redeemed  and  can 
celed.  The  act  of  May  6,  1866,  chapter  81,  section  3,  pro-  Printed  on  dis- 
hibited  the  issue  of  fractional  notes  of  a  less  denomination 
than  ten  cents,  and  required  those  outstanding  to  be  retained 
when  paid  into  the  Treasury  and  canceled.  The  3-cent 
and  5-cent  notes  have  ceased  to  be  printed,  and  those  paid 
in  have  not  been  reissued  since  the  passage  of  those  acts. 
The  15-cent  note  was  introduced  in  1869,  and  belongs  to  the 
now  latest  series.  The  new  fractional  currency  now  issued 
is  pointed  on  the  distinctive  paper  made  expressly  for  the 
Department^  and  differs  also  from  all  former  issues  in  the 
size,  color,  style,  and  details  of  the  engraving. 

"The  notes  for  parts  of  a  dollar  were  never  declared  to  Notaiegai  ten- 
be  lawful  money  or  a  legal  tender."  Lane  County  v.  Oregon,  changeable  for 
("7  Wallace,  75.)     But  they  are  "exchangeable  for  United  notes,  and  recciv 
States  notes  in  sums  not  less  than  three  dollars,  and  receiv-          ™ 


able  in  payment  of  all  dues  to  the  United  States  less  than 
five  dollars,  except  customs,"  by  the  terms  of  the  laws  arid 
the  language  of  the  notes. 

Within  the  fifty  millions  of  dollars  limited  by  each  of  the  Amount  kept  i 
acts  of  1863  and  1864,  the  amount  kept  in  circulation  is  de-  circulation- 
termined  wholly  by  the  wants  and  demands  of  the  public, 
who,  it  appears,  require  fractional  currency  in  the  propor 
tion  of  about  one  dollar  to  each  inhabitant  of  the  country. 
The  amount  in  circulation  rarely  goes  above  that  proportion, 
making  proper  allowance  for  lost  and  destroyed  notes,  and 
when  it  falls  much  below,  a  scarcity  is  sensibly  felt  through 
out  the  country. 


Pcnnl  offense  to 
have  in  one's 
possession,  &c., 
tho  distinctive 
paper  used  for 
printing  notes. 


48  DISTINCTIVE  PAPER.  [CHAP.  Ill 

4. 

DISTINCTIVE  PAPER  FOR  NOTES,  BONDS,  &c. 

The  act  of  June  30,  1864,  chapter  172,  section  11,  makes 
it  a  penal  offense  for  an}7  person  to  "have  or  retain  in  his 
custody  or  possession,  after  a  distinctive  paper  shall  have 
been  adopted  by  the  Secretary  of  the  Treasury  for  obliga 
tions  and  other  securities  of  the  United  States,  any  similar 
paper  adapted  to  the  making  of  any  such  obligation  or  other 
security,"  without  authority. 

All  United  States  notes,  fractional  currency,  and  bonds 
of  the  funded  loan  and  other  obligations  are  now  printed 
on  distinctive  paper,  manufactured  under  the  inspection  of 
officers  of  the  Treasury  Department,  at  a  mill  exclusively 
employed  for  that  purpose.  Upon  adopting  this  paper  the 
Secretary  of  the  Treasury  published  the  following  circular 
notice : 

WASHINGTON,  D.  0.,  July  21,  1869. 

Notice  is  hereby  given  that  the  Secretary  of  the  Treasury, 
by  authority  of  law,  has  adopted  a  di-stinctive  paper,  which 
will  be  hereafter  used,  until  otherwise  ordered,  for  all  obli 
gations  and  other  securities  of  the  United  States. 

One  of  its  peculiarities  is  the  introduction  of  colored  silk, 
cotton,  or  other  fibrous  material  into  the  body  of  the  paper 
while  in  the  process  of  manufacture. 

By  the  laws  of  the  United  States  it  is  made  a  felony  for 
any  person  to  have  or  retain  in  his  custody  or  possession 
any  paper  adapted  to  the  making  of  any  such  obligations 
or  securities,  and  similar  to  that  designated  by  the  Secretary 
of  the  Treasury,  except  under  authority  of  the  Secretary  of 
the  Treasury,  or  some  other  proper  officer  of  the  United 
States;  and  any  person  offending  against  the  statute  will, 
on  conviction  thereof,  be  punished  by  a  fine  not  exceeding 
five  thousand  dollars,  or  by  imprisonment  and  confinement 
at  hard  labor  not  exceeding  fifteen  years,  or  both,  in  the 
discretion  of  the  court.  G-EO.  S.  BOUTWELL, 

Secretary  of  the  Treasury. 

Another  pecuii-  Another  peculiarity,  and  perhaps  the  most  important  and 
distinctive  one,  is  the  localizing  of  blue  fibres  in  the  body 
of  the  paper,  or  the  introduction  of  blue  fibres  in  parallel 
lines  of  about  two  inches  in  width  and  about  three  and  a 


Notice  of  tna 
adoption  of  a  dis 
tinctive  paper. 


CHAP.  III.]  MUTILATED  CURRENCY.  4 

half  inches  apart,  in  addition  to  the  fibres  of  other  colors 
distributed  throughout  the  paper. 

5. 

REGULATIONS  AND  INSTRUCTIONS  FOR  REDEMPTION  OF  MUTILATED 
AND  DEFACED  CURRENCY. 

The  Treasury  Department  is   desirous  of  withdrawing  AH  defaced  not 
from  circulation  all  notes  issued  prior  to  1869,  as  well  as  ^^J^ 
all  mutilated  and  defaced  notes  and  fractional  currency,   drawn. 
and  of  keeping  in  circulation  throughout  the  country  clean 
new  currency  of  the  latest  issue,  and  has  adopted  the  fol 
lowing  regulations  and  instructions  on  that  subject,  and  in 
relation  to  the  redemption  of  fragmentary  notes  and  the 
distribution  of  new  currency  of  the  different  denominations 
and  of  the  most  recent  issue  : 

I.  Defaced  and  mutilated  currency. 

1.  Defaced  and  mutilated  United  States  and  fractional   what  notes  are 
notes,   each  equaling  or   exceeding  by  face  measurement  redeemable  at 
three-fifths  of  its  original  proportions  in  one  piece,  if  clearly 
genuine,  are  redeemable  at  the  full  face  value  of  whole 

notes,  in  new  currency,  by  the  Treasurer,  the  several  As 
sistant  Treasurers,  and  Depositaries  of  the  United  States, 
and  all  National  Bank  Depositaries,  and  are  receivable  at 
their  full  lace  value  by  all  .officers  of  the  Treasury  Depart 
ment  in  payment  of  currency  dues  to  the  United  States. 

2.  The  officers  and  Bank  Depositaries  by  whom  such  Defaced  notes 
currency  is  received  will  not  use  it  in  their  disbursements,   not  to  he  used  by 
but  will  forward  it  to  the  Treasurer  of  the  United  States  at  deP°si™'>k's' &( 
Washington  at  the  expense  of  the  Department,  under  the 
Government  contract  with  Adams  Express  Company. 

3.  Whenever  the  amount  presented  for  redemption  at  when  r 
one  time  to  an  Assistant  Treasurer,  Depositary,  or  Bank  IK^V  payable, 
Depositary  equals  or  exceeds  fifty  dollars  in  United  States 

notes,  or  five  dollars  in  fractional  currency,  it  is  optional 
with  the  officer  or  bank  to  either  pay  the  owner  its  value 
in  new  currency,  or  give  a  receipt  conditioned  for  such  pay 
ment  when  return  for  the  amount  has  been  received  from 
the  Treasurer. 

When  the  same  person  habitually  presents  currency  for 
redemption  in  sums  somewhat  less  than  those  mentioned,  it 
is  discretionary  with  the  officer  or  bank  to  refuse  to  receive 
it  until  it  has  been  made  up  to  the  required  amount. 
4 


face  value,  an<t 
how. 


50 


MUTILATED  CURRENCY. 


[CHAP.  III. 


Department  pays 
expense?  of 
transportation  to 
Washington. 


— desires  to  with 
draw  from  circu 
lation  defaced 
notes,  &c. 


Fractional  cur 
rency  to  be  as 
sorted,  &c. 


Fragmentary 
notes,  how  re 
deemed. 


— when  less  than 
half. 


4.  The  Department  will  receive  at  its  own  expense,  under 
trie  contract  with  Adams  Express  Company,  from  any  per 
son,   company,   firm,  bank,  or   corporation,  United  States 
notes  and  fractional  currency  which  are  defaced  or  muti 
lated,  or  in  any  way  unfit  for  circulation,  provided  that  the 
fractional  currency  be  sent  in  sums  of  five  dollars  and  up 
wards,  and  the  United  States  notes  in  sums  of  fifty  dollars 
and  upwards.     Parties  remitting  currency  for  redemption, 
and  especially  officers  of  the  department,  are,  however,  re 
quested  to  make  their  remittances  as  large  as  practicable, 
and,  when  it  is  possible,  to  remit  in  sums  of  one  thousand 
dollars  or  an  even  multiple  thereof. 

United  States  notes  and  fractional  currency  may  be  for 
warded  in  the  same  package  at  the  expense  of  the  Depart 
ment  if  at  least  five  dollars  in  fractional  currency  is  inclosed, 
or  if  the  amount  of  the  whole  remittance  equals  or  exceeds 
fifty  dollars. 

5.  The  Department  is  desirous  of  withdraxving  from  cir 
culation  all  United  States  notes  issued  -prior  to  the  issue  of 
1869,  whether  mutilated  or  defaced  or  not,  and  will  redeem 
them  on  the  same  terms  and  in  the  same  manner  as  notes 
unfit  for  circulation. 

6.  Fractional  currency,  before  being    presented  for    re 
demption,  must  be  assorted  into  the  different  issues ;  each 
issue  must  be  assorted  by  denominations  and  inclosed  in 
paper  straps  at  least  one  inch  wide,  securely  fastened ;  each 
strap ,  if  the  amount  of  the  parcel  will  admit,  must  con 
tain  one  hundred  notes  of  the  same  denomination ;  and  on 
each  strap  must  be  written  with  ink  the  number  of  pieces 
and    the   denomination    inclosed,    and    the    name    of   the 
owner.     The  entire  amount  must  be  securely  done  up  in 
one  package,  and  upon  the  wrapper  the  date,  the  amount 
inclosed,   and   the   name   of  the   owner   must   be  written 
with  ink. 

II.  Fragmentary  notes. 

1 .  Fragments  of  United  States  notes  and  fractional  cur 
rency,   constituting   less  than   three-fifths   of  the  original 
proportions  of  the  notes,  and  notes  torn  or  cut  into  pieces 
each  less  than  three-fifths,  are  redeemable  only  by  the  Treas 
urer  of  the  United  States. 

2.  Fragments  less    than  half  are  redeemed  only  when 
accompanied  by  an  affidavit  that  the  missing  portions  have 
been  totally  destroyed.     The  affidavit  must  state  the  cause 
and  the  manner  of  the  mutilation,  and  the  character  of  the 
affiant  must  be  certified  to  be  good  by  a  magistrate  or  other 
public  officer.     When  accompanied  by  satisfactory  proof, 


CHAP  III.] 


MUTILATED  CURRENCY. 


51 


—when  half  and 
less  than  three- 
fifths. 


Interest  on  frag 
mentary  notes 
bearing  interest. 

Rules  apply  to  old 
demand  notes. 


Unredeemed 
fragments  retain 
ed;  counterfeit 
notes  returned. 

Mode  of  trans 
mission  to  Treas 
urer. 


such  fragments  will  be  redeemed  at  the  full  face  value  of 
the  notes  of  which  they  are  part. 

3.  Fragments  each  less  than  half,  but  together  purport 
ing  to  constitute  more  than  one-half  of  a  note,  are  redeemed 
only  when  it  appears,  either  from  the  notes  themselves  or 
from  an  affidavit  made  in  conformity  to  the  foregoing  para 
graph,  that  they  are  actually  parts  of  one  original  note. 

4.  Fragments  constituting  half  or  more  than  half,  but 
less  than  three-fifths  of  notes,  when  unaccompanied  by  evi 
dence  that  the  missing  portions  have  been  destroyed,  arc 
redeemable  for  half  of  the  face  value  of  the  notes. 

5.  In  redeeming,  under  the  last  preceding   regulation, 
interest  notes,  with  which  interest  is  payable,  half  of  the  in 
terest  due  on  the  notes  will  be  paid. 

6.  Demand  notes  are  redeemable  in  coin  by  the  Treasurer, 
on  presentation  at  his  office,  on  the  same  terms  as  to  muti 
lations  as  United  States  notes. 

7.  Unredeemed  fragments  less  than  half  are  retained  by 
the  Treasurer;  counterfeit  notes  are  branded  and  returned. 

III.  Mode  of  transmission  to  Treasurer. 

When  a  person  making  a  remittance,  either  by  mail  or 
by  express,  fails  to  give  his  full  name  and  post-office  address, 
including  the  State,  the  remittance  is  retained  until  the  name 
and  address  are  furnished,  together  with  a  satisfactory  de 
scription  of  the  package  claimed. 

An  inventory,  describing  the  contents  by  parcels,  denom 
inations,  and  amounts,  should  accompany  every  remittance. 

IV.  Remittances  by  express. 

1.  All  remittances  for  redemption  should  be  addressed  to  -by  express. 
the  Treasurer  of  the  United  States,  Washington,  D.  C. 

2.  The  packages  should  be  put  up  in  wrappers  of  stout  packages,  how 
paper  or  cloth,  tied  with   strong  twine,  secured  by  careful  put  up. 
sealing,  and  plainly  marked  on  the  outside  with  the  amount 

and  nature  of  the  contents,  the  full  name  and  post-office  ad 
dress  of  the  consignor,  and  the  fact  that  they  are  forwarded 
under  the  Government  contract  with  Adams  Express  Com 
pany. 

3.  A  letter  of  advice,  written  on  not  less  than  half  a  sheet   -accompanied 
of  commercial  note  paper,  must  be  put  inside  the  package,   with  letter. 
and  a  duplicate  letter  should  be  sent  by  mail  to  the  Treasu 
rer  on  the  day  that  the  remittance  is  forwarded. 

V.  Remittances  by  mail. 

1.  All  remittances  by  mail  for  redemption  should  be  ad-  Remittances  by 
dressed  to  the  Treasurer  of  the  United  States,  Washington,   man. 


52 


MUTILATED  CURRENCY. 


[CHAP.  Ill 


—how  sealed  up, 
Ac. 


Remittances  by 
mail  are  at  risk  of 


Return  of  new 
notes  or  checks, 
now  made. 


—how  usually 
made. 


Same  subject. 


Proceeds  from 
Government  offi 
cers  credited  to 
their  accounts  if 
desired. 


D.  C.     Letters  or  packages  so  addressed  are  forwarded  with 
out  charge  for  postage,  whether  they  contain  money  or  not. 

2.  Money  for  redemption,  after  heing  prepared  as  herein 
before  directed,  should  be  sealed  or  tied  up  in  paper  of  suit 
able  strength,  and  plainly  marked  on  the  outside  with  the 
owner's  name  and  full  address,  and  with  the  amount  inclosed. 
The  package  should  then  be  sealed  up  in  an  envelope,  to 
gether  with  a  letter  of  advice,  written  on  not  less  than  half 
a  sheet  of  commercial  note  paper,  stating  the  name  and  full 
post-office  address  of  the  owner,  the  value  of  the  remittance, 
and  the  manner  in  which  return  shall  be  made. 

3.  Remittances  to  the  Treasurer  by  mail  are  invariably 
at  the  risk  of  the  owners.     All  communications  to  the  Treas 
urer,  in  regard  to  packages  ascertained  to  have  been  lost  in 
transmission  by  mail,  are  referred  for  investigation  to  the 
Second  Assistant  Postmaster  General,  to  whom  any  further 
inquiry  on  the  subject  should  be  addressed. 

4.  It  is  a  protection  against  loss  to  register  letters  contain 
ing  money ;  but  the  registry  fee  must  in  all  cases  be  prepaid 
by  the  party  remitting. 

VI.  Returns,  how  mads. 

1.  Returns  for  amounts  less  than  five  dollars  are  usually 
made  in  new  currency  by  mail  at  the  owner's  risk,  but  if 
he   so  requests,  returns  are  made  by  check  on  any  of  the 
cities  named  below,  or  in  new  currency  by  express  at  his 
expense. 

2.  Returns  for  amounts  of  five  dollars  and  upwards,  re 
ceived  by  mail,  are  usually  made  by  transfer  checks  on  the 
Assistant  Treasurer  of  the  United  States  in  New  York,  Bos 
ton,  Philadelphia,  New  Orleans,  or  San  Francisco,  as  the 
owner  may  request;  but  if  the  owner  desires  new  currency, 
it  will  be  forwarded  by  express,  on  the  terms  stated  in  the 
next  paragraph. 

3.  Returns  for  amounts  of  five  dollars  and  upwards  in 
fractional  currency,  and  fifty  dollars  and  upwards  in  United 
States  notes,  are  ordinarily  made  in  new  currency  by  express, 
at  the  expense  of  the  Department ;  but  if  the  owner  requests 
it,  a  check  on  any  of  the  above-mentioned  Assistant  Treas 
urers  will  be  sent.     Returns  for  five,  or  more  than  five  but 
less  than  fifty  dollars,  in  United  States  notes,  are  ordinarily 
made  by  check  ;  but  new  currency  is  returned  by  express,  at 
the  owner's  expense,  whenever  he  requests  it. 

4.  The  proceeds  of  remittances  from  Assistant  Treasurers, 
Designated  Depositaries,  and  other  officers  of  the  Govern 
ment,  and  National  Bank  depositaries,  are,,  when  they  so 
request,  credited  in  account. 


CHAP.  III.j  MUTILATED  CURRENCY.  53 

VII.   General  Instructions. 

1.  Every  officer  of  the  Treasury  Department  is  required,   spurious  n^tes  tc 
whenever  any  spurious  note  purporting  to  have  been  issued  be  stamPe<1- 
by  the  United  States  is  presented  to  him,  to  write  or  stamp 

on  it  the  word  "Counterfeit." 

2.  Notes  of  National  Banks  that  have  failed  or  gone  into  Notes  of  faiie,j 
voluntary  liquidation  are  received,  redeemed,  and  forwarded  banks,  how  re- 
to  the  Treasurer  by  the  officers  and  banks  before-mentioned  d 

for  retirement  under  these  rules,  in  the  same  manner  and 
on  the  same  terms  as  United  States  notes  of  issues  prior  to 
1869.  Notes  of  all  other  National  Banks,  whether  muti 
lated  or  not,  are  redeemable  only  by  the  banks  which  issued 
them  and  by  their  redeeming  agents. 

3.  In  case  of  the  loss  or  destruction  of  one  of  his  checks,   Payment  of  lost 
and  of  an  application  for  a  duplicate,  the  Treasurer  stops  cjieeks  may  be 
payment  of  the  original  check,  and  furnishes  the  applicant 

for  a  duplicate  with  a  form  of  bond  of  indemnity,  upon  re 
turn  of  which,  properly  executed,  a  duplicate  is  issued. 

VIII.  New  fractional  currency. 

In  addition  to  being  forwarded,  when  desired,  in  return  New  fractional 
for  old,  defaced,  and  mutilated  currency,  on  the  terms  al-  currency,  how 
ready  mentioned,  new  fractional  currency  is  forwarded  by 
express  from  the  Treasurer's  office,  under  the  Government 
contract  with  Adams  Express,  Company,  in  sums  of  even 
thousands  of  dollars  — 

1.  On  the  receipt  of  original  certificates  of  deposit  to  the 
Treasurer's  credit,  issued  by  Assistant  Treasurers  and  Des 
ignated   Depositaries  of  the  United   States  and   National 
Bank  Depositaries  ;  and 

2.  On  the  receipt  and  collection  of  drafts  on  banks  and 
bankers  in  Boston,  New  York,  Philadelphia,  and  Wash 
ington. 

If  the  amount  applied  for  is  less  than  one  thousand  dol 
lars,  the  express  charges  at  contract  rates  are  deducted  from 
the  remittance  ;  if  less  than  an  even  multiple  of  one  thous 
and  dollars,  the  charges  on  the  fractional  part  of  one 
thousand  dollars  included  in  the  amount  are  deducted. 


IX.   Government  contract  with  Adams  Express  Company. 

1.  The  Government  contract  with  Adams  Express  Com-  contract  with  ex- 
pany  extends  to  and  includes  all  cc  points  accessible  through  press  company 

notes,  &c. 


established  express  lines,  reached  by  continuous  railway  i 


connection,"  within  the  United  States,  but  does  not  extend 
westward  beyond  Omaha  and  Nebraska  City,  in  Nebraska, 
and  Atchison  and  Leavenworth,  in  Kansas,  nor  include  the 


54  MUTILATED  CURRENCY.  [CHAP.  IIL 

lines  of  Wells,  Fargo  &  Co.,  in  Missouri  and  Iowa.  The 
contract  covers  the  lines  of  the  following  express  compa 
nies:  Adams,  American  Merchants'  Union,  Central,  Earl, 
Eastern,  Harnden,  Hope,  Howard,  National,  New  Jersey, 
Southern,  Union,  United  States,  and  United  States  and 
Canada.  Remittances  can  be  made  by  express  by  private 
parties,  at  the  expense  of  the  Department,,  only  from  points 
within  the  territory  covered  by  the  contract. 


CHAP.  IV. "I  REGISTERED  HONDS.  65 


CHAPTER  IV. 

REGISTERED  AND  COUPON  BONDS,  HOW  TRANSFERRED;  ISSUE  OF 
DUPLICATES  IN  CASE  OF  LOSS  OR  DESTRUCTION;  CONVERSION 
OF  BONDS;  PAYMENT  OF  INTEREST. 

I.   Registered   bonds   or   stock,  how    as-   I   5.   Conversion  of  coupon  bonds  to  regis- 


signed. 

2.  Lost  or  destroyed  registered  bonds. 

3.  Coupon  bonds,  how  transferred. 

4.  Destroyed  and  defaced  bonds. 


tered  stock. 

6.  Payment  of  interest  on  registered  stock. 

7.  Payment  of  coupons. 

8.  Payment  of  interest  before  maturity. 


1. 

EEGISTERED  BONDS  OR  STOCK,  HOW  ASSIGNED. 

These  bonds,  without  coupons  attached,  are  made  payable  Registered 
to  the  person  or  persons  named  therein,  who  alone  can  col- 
lect  the  interest  thereon  and  the  principal  when  payable, 
and  are  transferable  only  on  the  books  of  the  Register  of  the 
Treasury,  in  accordance  with  the  following  rules  and  in 
structions  of  the  Treasury  Department : 

Transfer  of  stock  or  registered  bonds. 

Stock  to  be  transferred,  when  properly  perfected,,  should  Rules  and  regu- 
be  transmitted  to  the  REGISTER  OF  THE  TREASURY,  accompa-  lations  for  trans- 
nied  by  an  explicit  letter  of  instructions,  giving  the  official 
title  of  the  loan ;  the  date  of  the  authorizing  act ;  the  num 
ber  and  amount  of  each  certificate ;  the  name  of  the  assignee, 
plainly  written;  his  place  of  residence,  giving  the  number 
of  the  house,  the  name  of  the  street,  and  the  city  or  town, 
county,  and  State ;  the  denomination  of  the  certificates  de 
sired  in  exchange ;  and  the  depository  at  which  the  interest 
is  to  be  made  payable. 

If  stock  of  different  loans  is  sent  at  the  same  time,  a  sep 
arate  letter  must  accompany  each  issue  or  series,  like  the 
following  form : 


56 


REGISTERED  BONDS. 


[CHAP.  IV. 


FOOD  of  letter. 


Closing  of  the 
transfer  books. 


Form  of  letter. 

NEW  YORK,  August  10,  1872. 
To  the  KEGISTER  OF  THE  TREASURY  : 

Herewith  find  $20,000  registered  stock,  CONSOLS  of  1868: 
act  of  March  3,  1865,  viz  : 


New  certificates. 


No.  13,921 $500 

13,987 500 

6,232 1,000 

6,409 1,000 

6,101 1,000 


No.  2,112. 

813, 

1,627, 


$1,000 

5,000 

10,000 


$20,000 


Which  please  register  in  two  $10,000  certificates  in  the 
name  of  Jno.  Henry  Brown,  of  No.  23  Waverly  street, 
Chicago,  Cook  county,  Illinois,  making  the  interest  paya 
ble  at  the  United  States  Depositor}^,  Chicago,  Illinois. 

Very  respectfully,  JNO.  HENRY  BROWN. 

New  certificates. 

The  certificates  forwarded  for  transfer  are  canceled,  and 
new  ones  issued  in  the  name  of  the  assignee. 

The  new  certificate  bears  interest  from  the  first  day  of 
the  quarter  or  half  year  (as  the  interest  may  be  payable)  in 
which  the  transfer  is  made. 

The  new  certificate  is  usually  returned  the  same  day  the 
old  is  received,  and  is  invariably  sent  by  mail  to  the  party 
forwarding  the  assigned  certificate,  unless  otherwise  posi 
tively  instructed. 

.  If  the  certificate  is  sent  by  express,  it  must  be  at  the  cost 
of  the  party  so  ordering. 

Closing  of  the  transfer  books. 

For  the  purpose  of  preparing  the  interest  schedules,  the 
transfer  books  are  closed  for  thirty  days  on  all  loans  except 
the  Funded  Loan  of  1881,  and  on  this  latter  for  fifteen  days, 
immediately  preceding  interest  day.  The  dates  of  closing 
are  as  follows  : 

Loan  of  1858 — June  1st  and  December  1st. 

Loan  of  February,  1861 — June  1st  and  December  1st. 

Loan  of  July,  1861 — June  1st  and  December  1st. 

Five-twenties  of  1862 — April  1st  and  October  1st. 

Loan  of  1863 — June  1st  and  December  1st. 

Ten-forties  of  1864 — February  1st  arid  August  1st. 

Five-twenties  of  March,  1864 — April  1st  and  October  1st, 

Five-twenties  of  June,  1864 — April  1st  and  October  1st. 

Five-twenties  of  1865 — April  1st  arid  October  1st. 


CHAP.  IV.]  REGISTERED  BONDS.  57 

Consols  of  1865 — June  1st  and  December  1st. 
Consols  of  1867 — June  1st  and  December  1st. 
Consols  of  1868 — June  1st  and  December  1st. 
Funded  loan  of  1881 — January  15,  April  15,  July  15, 
and  October  15. 

Pacific  Kailway  stock — June  1st  and  December  1st. 

If  stock  to  be  transferred  is  not  received  previous  to  the  who  entitled  to 

day  for  closing  the  transfer  books,  the  dividend  will  be  {^^J^ 

declared  to  the  party  whose  name  appears  upon  the  face  of  after  books 

the  certificate  and  the  record,  and  the  assignee  must  look  closed, 
to  him  for  the  accrued  interest  for  that  quarter  or  half  year. 

Form  of  assignment. 

The  printed  form  on  the  back  of  the  certificate  should  be  Form  of  assign- 
carefully  followed,  arid  all  the  blanks  filled.  ments- 

The  name  of  the  assignee  should  be  plainly  written  in 
full  in  the  blank  space  for  that  purpose. 

If  the  certificate  is  to  be  divided  among  two  or  more  per 
sons,  their  names  and  the  amount  to  each  should  be  plainly 
indicated  in  the  assignment.  If  only  a  part  of  the  certifi 
cate  is  assigned,  a  new  certificate  for  the  remainder  will  be 
issued  to  the  former  payee. 

Certificates  should  never  be  assigned  in  blank,  as  this 
gives  them  the  character  of  coupon  bonds,  and  they  are 
then  transferable  by  delivery. 

A  detached  assignment,  where  no  assignment  appears  on 
the  bond,  should  never  be  used,  as  it  invites  fraud  or 
forgery  should  the  certificate  fall  into  improper  hands. 

Assignments  by  representatives  of  deceased  persons. 

In  case  of  death  or  successorship,  the  representative  or  Assignments  by 
successor  must  furnish  official  evidence  of  decease  and  ap-  representatives 

.     .  of  deceased  per- 

pomtment.  sons> 

An  executor  or  administrator  may  assign  stock  standing 

in  the  name  of  a  deceased  person. 

Where  there  is  more  than  one  legal  representative,  all 

must  unite  in  the  assignment,  unless  by  a  decree  of  court 

or  provision  of  will  some  one  is  designated  to  dispose  of  the 

stock. 

If  the  stock  was  held  by  the  deceased  as  a  fiduciary,  the 

letters  of  administration  must  be  accompanied  by  an  order 

of  the  court,  authorizing  the  transfer. 

Assignments  in  foreign  countries. 

Where  the  payee  at  the  time  of  his  death  was  a  resident  —in  foreign 
of  a  foreign   country,   the  person  claiming   to   direct  the 


58 


REGISTERED  BONDS. 


[CHAP.   IV. 


transfer  must  produce  an  exemplified  copy  of  the  will  or 
other  instrument  conferring  the  authority,  duly  certified 
under  the  hand  and  seal  of  the  proper  officer,  attested  by 
the  certificate  of  a  United  States  minister,  charge,  consul, 
vice  consul,  or  commercial  agent,  or,  if  there  be  none,  by  a 
notary  public,  to  the  effect  that  such  exemplified  copy  is 
granted  by  the  proper  officer  or  tribunal,  and  is  in  due 
form,  and  according  to  the  laws  of  the  country.  The  as 
signment  should  be  executed  as  hereinbefore  directed. 


Execution  of  assignments. 


it 


Execution  of  p.s-        The  payee  should  sign  his  name  to  the  assignment  as 
signmcnts.  js  written  in  the  face  of  the  certificate. 

If  issued  to  a  firm,  it  must  be  signed  by  a  member  author 
ized  to  sign  the  firm-name,  of  which  authority  the  person 
witnessing  must  be  satisfied ;  if  to  joint  owners,  co-trustees, 
executors,  administrators,  or  guardians,  each  person  must 
sign  for  himself;  if  to  a  corporation  or  company,  the  official 
character  of  the  person  signing,  and  his  authority  to  dis 
pose  of  the  stock,  should  be  duly  attested  by  vote  or  resolu 
tion  of  the  board  of  directors,  or  its  equivalent,  certified 
under  seal. 

Where  an  officer  is  authorized  to  assign  by  virtue  of  his 
office,  a  certificate  of  the  fact  and  of  his  election  must  be  fur 
nished,  under  seal,  together  with  a  certified  copy  of  the  by 
laws.     All  such  certificates  are  placed  on  file  for  reference 
in  future  transactions,  and  need  not  be  repeated  if  properly 
referred  to. 

The  following  form  of  authority  may  be  used : 

Form  of  authority  by  vote. 

Form  of  author-        At  a  meeting  of  the  Board  of  Directors  of  the  National 
itybyvote.          Savings  Institution  of  Washington,  D.  C.,  held  July  10, 
1872,  it  was,  on  motion, 

Resolved,  That  James  Jones,  President,  and  Henry 
Smith,  Treasurer,  or  either  of  them,  are  hereby  authorized 
and  empowered  to  assign  any  and  all  United  States  stock 
now  standing  [or  which  may  hereafter  stand]  in  the  name 
of  this  institution. 

I  certify  that  the  above  is  a  true  copy  from  the  minutes. 

[Corporate  seal.]  HENRY  Sjl HH, 

Treasurer  and  Secretary  of  Board. 

Form  of  vote  under  by-laws. 

-n^der  by-laws.        At  the  annual  meeting  of  the  stockholders  of  the  Treas 
ury  National  Bank  of  Washington,  D.  C.,  held  July   1, 


CHAP.  IY.1  REGISTERED  BONDS.  59 

1872,  John  Doe  was  duly  elected  President,  and  Richard 
Roe  Cashier,  and,  as  such,  are  jointly  or  severally  empow 
ered  by  the  by-laws  (a  certified  copy  of  which  is  hereto  an 
nexed)  to  sell  and  assign  any  and  all  United  States  stock 
now  standing,  or  which  may  hereafter  stand,  in  the  name 
of  this  bank. 

Attest:  RICHARD  ROE,  Cashier. 

[Seal  of  bank.] 

Acknowledgment  of  assignment, 

Acknowledgments  of  assignments,  when  not  made  at  the  Ac-knowiedg- 
Department,  must  be  before  an  Assistant  Treasurer,  Desig-  "^ofass:ga* 
nated   Depositary,  United  States  judge,  district  attorney, 
clerk  of  a  United  States  court,   or  collector  of  customs, 
but  a  notary  public  is  authorized  to  take  acknowledgments 
on  all  loans  except  the  Funded  Loan  of  1881,  and  on  this 
loan  the  president  or  cashier  of  a  National  Bank  is  au 
thorized. 

The  witness  must,  in  all  cases,  append  his  official  title, 
and  affix  his  seal  of  office,  if  he  has  one.  The  president  or 
cashier  of  a  National  Bank  must  affix  the  title  of  the  bank. 

Acknowledgment  in  foreign  countries. 

Acknowledgments  in  foreign  countries  may  be  made  be-  —  in  foreign, 
fore  a  United  States  minister,  charge,  consul,  vice  consul,   countries- 
or  commercial  agent.     A  notary  public,  or  other  equivalent 
officer,  in  a  foreign   country,  may  take  acknowledgments, 
but  his  official  character  must  be  properly  verified.     The 
official  seal,  where  there  is  one,  should  in  all  cases  be  af 
fixed. 

Powers  of  attorney  to  assign  stock. 

Persons  entitled  to  assign  stock  may  appoint  an  attorney  powers  of  attor- 
for  that  purpose,  who,  by  virtue  of  the  authority  so  con-  ney  to  assign 
ferred,  can  execute  the  assignment  in  the  same  manner  as  8 
provided  for  the  constituent.     No  officer  of  the  Treasury 
should  be  selected  as  attorney.     The  following  form  may 
be  used : 

Form  of  power. 
KNOW  ALL  MEN  BY  THESE  PRESENTS,    That   I,   John   Doe,  do    — f°wn  ft 

hereby  appoint  Richard  Roe  my  attorney,  to  sell  and  as 
sign  all  United  States  stock  now  standing  [or  ivliicli  may 
hereafter  stand]  in  my  name  on  the  books  of  the  Treasury 
Department,  granting  to  said  attorney  full  power  to  appoint 
one  or  more  substitutes  for  that  purpose,  hereby  ratifying 
and  confirming  all  that  may  be  lawfully  done  by  virtue 
hereof. 


60 


LOST  REGISTERED  BONDS. 


[ClIAP.  IV. 


Witness  my  hand  and  seal  this  9th  day  of  July,  A.  D. 
1872.  JOHN  DOE.  [y-^--] 

Executed  before  me  this  10th  day  of  July,  A.  D.  1872. 

[Official  seal.]  J°HN  JoNES> 

Collector  of  Customs,  Chicago,  III. 

Power  to  collect  interest. 

Powers  to  collect  interest  should  follow  the  same  general 
form. 

Acknowledgment  of  powers. 

Powers  of  attorney  for  the  transfer  of  stock  or  the  collec 
tion  of  interest  must  be  acknowledged  in  the  presence  of 
some  one  of  the  officers  authorized  to  take  acknowledg 
ments  of  assignments.  Where  any  such  officer  has  an 
official  seal,,  it  must  be  affixed. 


Powers  of  substitution. 

powers  of  eubsti-  Powers  of  substitution  must  be  executed  and  acknowl 
edged  in  the  same  manner  as  powers  of  attorney,  and  should 
follow  the  same  general  form. 


—to  coll  act  in 
terest. 


^—acknowledg 
ment  of. 


tntion. 


No  fees  charg- 
able  for  assign 
ments. 


No  fees. 

No  fees  will  be  charged  by  a  United  States  minister, 
charge,  consul.,  vice  consul,  or  commercial  agent  for  wit 
nessing  and  certifying  an  assignment  or  power  to  assign 
stock  or  collect  interest  thereon.  No  charge  is  made  by 
the  Department  for  transferring  certificates  or  lor  changing 
coupon  bonds  into  registered  stock. 

Papers  in  foreign  languages. 

papers  in  foreign       Powers  of  attorney,  and  all  other  papers  executed  in  the 
languages  must     United  States,  must  be  in  the  English  language.     If  exe 
cuted  abroad  in  any  other  language,  an  accurate  English 
translation  must  accompany  each. 


he  translated. 


2. 


LOST  on  DESTROYED  KEGISTERED  BONDS. 


Notice  of  lost  Owners  of  lost  or  stolen  registered  bonds  should  give  no- 

Bhouidbtg^en9  tice  of  the  fact  of  the  loss  or  larcenJ>  as  soon  as  known  to 
to  Treasury  DO-     them,  to  the  Treasury  Department  at  Washington,  D.  C., 

in  order  that  innocent  persons  may  be  saved,  if  possible, 


CHAP.  IV.]  LOST  REGISTERED  BONDS.  f,l 

from  loss  by  forged  or  fraudulent  assignments  on  the  back 
of  the  certificates. 

When  a  caveated  registered  bond  is  sent  in  for  transfer, 
the  Treasury  Department  retains  and  holds  it  for  the  rightful 
owner,  to  whom  notice  of  the  fact  is  immediately  given,  and 
at  the  same  time  notice  that  the  assignment  is  supposed  or 
claimed  to  be  fraudulent  is  sent  to  the  person  from  whom  it 
was  received,  that  he  may  institute  measures  to  trace  out  the 
parties  to  the  fraud ;  but  the  Department  does  not  undertake, 
by  detectives  or  otherwise,  to  discover  the  guilty  persons. 

Whether  or  not  any  particular  bond  has  been  caveated 
may  be  ascertained,  if  the  genuine  number  is  known,  by 
writing  to  the  Secretary  of  the  Treasury  for  information. 

Owners  of  lost  or  destroyed  registered  bonds  may  obtain  Duplicates  of  lost 
duplicates  thereof  by  complying  with  the  provisions  of  the  ^l^^^^&~ 
following  law  of  Congress,  passed  for  that  purpose : 

JOINT    RESOLUTION    TO    ENABLE    OWNERS    TO    OBTAIN    DUPLICATES  OF    LOST  AND 
DESTROYED    REGISTERED    BONDS    OF    THE    UNITED    STATES. 

Resolved  by  the  Senate  and  House  of  Representatives  of  the  Law  of  congress. 
United  States  of  America  in  Congress  assembled,  That  the 
Secretary  of  the  Treasury  be,  and  hereby  is,  authorized  and 
directed,  whenever  it  is  proved  by  clear  and  satisfactory 
evidence  that  any  duly  registered  bond  of  the  United  States, 
bearing  interest,  issued  for  valuable  consideration  in  pur 
suance  of  law,  has  been  lost  or  destroyed,  so  that  the  same 
is  not  held  by  any  person  as  his  own  property,  to  issue  a 
duplicate  of  said  registered  bond,  to  be  so  marked,  of  like 
amount,  and  bearing  like  interest  as  the  bond  so  proved  to 
be  lost  or  destroyed : 

Provided,  That  the  owner  of  such  missing  bond  shall 
file  in  the  Treasury  a  bond  in  a  penal  sum  equal  to  the 
amount  of  said  missing  bond,  and  the  interest  which  would 
accrue  thereon,  until  the  principal  thereof  is  due  and  paya 
ble,  with  two  good  and  sufficient  sureties,  residents  of  the 
United  States,  to  the  approval  of  the  Secretary  of  the  Treas 
ury,  with  condition  to  indemnify  and  save  harmless  the 
United  States  from  any  claim  because  of  the  said  lost  or 
destroyed  bond. 

Approved  March  3,  1871. 

The  regulations  and  instructions  of  the  Treasury  Depart-  Regulations  re- 
rnent  in  relation  to  lost  certificates  are  as  follows  :  spectmj?  lost  ce/ 


62 


LOST  REGISTERED  BONDS. 


[CHAP.  IV, 


Caveating  lost 
certificates. 


Form  of  caveat. 


Duplicates 
obtained. 


how 


Lost  certificates. 

The  Secretary  of  the  Treasury  should  he  immediately 
notified  of  the  loss  of  any  certificate  of  registered  stock,  that 
a  caveat  may  he  entered  against  its  transfer. 

The  notice  should  give  the  number  and  amount  of  the 
certificate;  the  official  title  of  the  loan;   the  date  of  the 
authorizing  act;  and  the  name  and  address  of  the  regis 
tered  payee. 

If  the  stock  is  not  recovered  within  a  reasonable  time,  a 
duplicate  will  be  issued,  under  the  regulations  hereinafter 
prescribed. 

The  law  does  not  authorize  the  issue  of  duplicates  in  lieu 
of  lost  coupon  bonds. 

The  following  form  of  caveat  may  be  used : 

Form  of  caveat. 

NEW  YORK  CITY,  August  1, 1872. 
To  the  SECRETARY  OF  THE  TREASURY: 

Please  take  notice  that  certificates  of  registered  stock — 
No.  2310  for  $10,000,  Loan  of  July,  1861,  acts  of  July  17 

and  August  5.  1861 ; 

903  for  $5,000,  Loan  of  1863,  act  of  March  3,  1863; 
1220  for  $5,000,  Five-twenties  of  1865,  act  of  March  3, 

1865; 
1920  for  $10,000,  Funded  Loan  of  1881,  acts  of  July 

14,  1870,  and  January  20,  1871, 

were  stolen  from  the  undersigned  on  or  about  the  25th  day 
of  July  last.     Please  enter  a  caveat  against  their  transfer. 
The  registered  payee  of  the  first  one  was  Jno.  Doe,  of  No. 
25  Kiver  street,  Troy.  N.  Y.,  and  of  the  other  three, 
Respectfully,  yours,  RICHARD  ROE, 

Of  No.  9  Park  Place,  New  York  City. 

Duplicates,  how  obtained. 

In  case  a  lost  certificate  of  registered  stock  cannot  be 
recovered,  the  payee  should  furnish  the  Secretary  of  the 
Treasury  with  an  affidavit,  duly  authenticated,  showing  the 
number  and  amount  of  the  certificate ;  the  official  title  of 
the  loan ;  the  date  of  the  authorizing  act ;  the  name  and 
address  of  the  registered  payee ;  the  name  of  the  assignor 
and  assignee ;  the  time  and  place  of  purchase ;  of  whom 
purchased ;  the  consideration  paid ;  and  the  material  facts 
and  circumstances  attending  the  loss. 

On  receipt  of  this  affidavit,  with  such  additional  evidence 
as  the  payee  may  be  able  to  furnish,  the  case  will  be  re 
ferred  to  the  proper  officer  for  his  decision. 


CIUP  IV.]  LOST  REGISTERED  BONDS.  63 

As  soon  as  a  favorable  conclusion  is  reached,  a  bond  of 
indemnity  in  double  the  amount  of  the  lost  certificate  will 
be  prepared  and  forwarded  for  execution ;  and  upon  its  re 
turn,  executed  in  conformity  to  instructions,  the  duplicate 
will  be  issued. 

In  all  cases,  and  especially  where  there  are  conflicting 
claimants,  proofs  should  be  made  as  full  and  clear  as  possi 
ble,  that  the  title  be  so  proved  as  to  leave  no  doubt  of  the 
good  faith  of  the  holder  or  claimant. 

The  following  form  of  affidavit  may  be  used: 

Form  of  affidavit. 

Personally  appeared  before  me,  a  notary  public  in  and  Form  of  affidavit, 
for  the  county  of  Cook,  and  State  of  Illinois,  the  subscriber, 
John  Doe,  who,  being  duly  sworn  according  to  law,  deposes 
and  says :  That  he  was  the  lawful  owner  of  one  certificate 
of  registered  stock  of  the  United  States,  numbered  two  hun 
dred  and  three,  (203,)  for  ten  thousand  (10,000)  dollars, 
Consols  of  1868,  act  of  March  3,  1865,  registered  at  the 
Treasury  of  the  United  States  in  the  name  of  Richard  Roe, 
now  residing  at  number  two  hundred  and  nine  (209)  South 
Clark  street,  in  the  city  of  Chicago,  and  State  of  Illinois ; 
that  the  said  certificate  was  indorsed  to  me  by  the  said 
Ki chard  Roe,  all  the  blanks  thereon  being  properly  rilled 
out,  and  the  transfer  witnessed  by  John  Smith,  United 
States  district  attorney  for  the  northern  district  of  Illinois ; 
that  said  stock  was  purchased  at  Chicago,  Illinois,  on  or 
about  the  15th  day  of  July,  A.  D.  1872,  of  the  said  Richard 
Roe ;  that  the  consideration  paid  therefor  was  eleven  thous 
and  two  hundred  (11,200)  dollars,  lawful  money  of  the 
United  States ;  that  the  said  certificate  was  stolen  from  the 
vault  of  the  Ninth  National  Bank  of  the  City  of  Chicago, 
on  the  night  of  the  20th  of  July,  A.  D.  1872,  by  some  per 
son  or  persons  unknown  to  me ;  and  that  due  diligence  has 
been  exercised  in  endeavoring  to  recover  the  same,  without 
success.  JOHN  DOE, 

Of  No.  23  West  Lake  street,  Chicago,  III 

Sworn  and  subscribed  before  me  this  1st  day  of  August, 
A.  D.  1872.  JOHN  JONES, 

[Notarial  seal.]  Notary  Public. 

Destroyed  or  mutilated  bonds,  whether  registered  or  coupon. 

Parties  presenting  claims  on  account  of  coupon  or  regis-  ? 

,     ,         \  »  .      I  ".        hinted  bonds, 

tered  bonds,  which  have  been  destroyed  in  whole  or  in  whether  regis- 
part,  must  furnish  the  same  evidence  as  in  the  case  of  lost  tered  or  coupon. 


64 


COUPON  BONDS. 


[CnAF.  IV. 


bonds,  and,  in  addition,  must  state  whether  the  bonds  were 
coupon  or  registered. 

-same  subject.  Duplicates  of  bonds  which  are  mutilated,  defaced,  or  in 
dorsed,  so  as  to  be  unsaleable,  may  be  obtained  under 
another  law  hereinafter  set  forth  without  giving  a  bond  of 
indemnity.  (Seepage  68.) 


Coupon  bonds. 


Decision.?  of  the 
courts  as  to 
transfer  of  bonds 
before  maturity. 


Different,  rule  aj>- 
plicable  to  bonds 
over-due. 


3. 

COUPON  BONDS,  HOW  TRANSFERRED. 

These  bonds,  with  the  semi-annual  or  quarter-annual 
coupons  attached,  are  payable  to  bearer,  and  the  legal  title 
thereto  passes  by  delivery,  like  bank  bills  and  legal-tender 
notes.  The  Government  pays  them  to  the  bearer  who 
holds  them  in  good  faith,  without  investigating  how  pre 
vious  holders  acquired  their  title. 

The  Supreme  Court  of  the  United  States  has  recognized 
and  settled  the  following  principles  as  applicable  to  coupon 
bonds : 

"The  possession  of  such  paper  carries  the  title  with  it  to 
the  holder.  'The  possession  and  title  are  one  and  insepar 
able.'  The  party  who  takes  it  before  due  for  a  valuable 
consideration,  without  knowledge  of  any  defect  of  title,  and 
in  good  faith,  holds  it  by  a  title  valid  against  all  the  world. 
Suspicion  of  defect  of  title,  or  the  knowledge  of  circum 
stances  which  would  excite  such  suspicion  in  the  mind  of  a 
prudent  man,  or  gross  negligence  on  the  part  of  the  taker 
at  the  time  of  the  transfer,  will  not  defeat  his  title.  That 
result  can  be  produced  only  by  bad  faith  on  his  part.  The 
burden  of  proof  lies  on  the  person  who  assails  the  right 
claimed  by  the  party  in  possession.  Such  is  the  settled  law 
of  this  court,  and  we  feel  no  disposition  to  depart  from  it." 
(Murray  v.  Lardner,  2  Wallace,  110 ;  Thomson  v.  Lee  County, 
3  Wallace,  327;  Texas  v.  White,  7  Wallace,  735.) 

"These  rules  were  fully  discussed  in  Murray  v.  Lardner, 
(cited  above.)  We  held  in  that  case  that  the  purchaser  of 
coupon  bonds  before  due,  without  notice  and  in  good  faith, 
is  unaffected  by  want  of  title  in  the  seller,  and  that  the 
burden  of  proof,  in  respect  to  notice  and  want  of  good  faith, 
is  on  the  claimant  of  the  bonds  as  against  the  purchaser. 
We  are  entirely  satisfied  with  this  doctrine."  "But  these 
rules  have  never  been  applied  to  matured  obligations. 


CHAP.  IV.] 


COUPON  BONDS. 


Purchasers  of  notes  or  bonds  past  due  take  nothing  but 
the  actual  right  and  title  of  the  vendors.  The  bonds  in 
question  were  dated  January  1,  1851,  and  were  redeemable 
after  the  31st  of  December,  1864.  In  strictness,  it  is  true 
they  were  not  payable  on  the  clay  when  they  became  re 
deemable;  but  the  known  usage  of  the  United  States  to 
pay  all  bonds  as  soon  as  the  right  of  payment  accrues,  ex 
cept  where  a  distinction  between  redeemability  and  paya 
bility  is  made  by  law,  and  shown  on  the  face  of  the  bonds, 
requires  the  application  of  the  rule  respecting  over-due 
obligations  to  bonds  of  the  United  States  which  have  be 
come  redeemable,  and  in  respect  to  which  no  such  distinc 
tion  has  been  made."  (Texas  v.  White,  7  Wallace,  735; 
Texas  v.  Hardenberg,  10  Wallace,  68.) 

The  Supreme  Judicial  Court  of  Massachusetts  has  made  Title  of  ho/^rs 
the  following  decision  as  to  the  title  of  holders  of  coupons: 

"But  in  the  opinion  of  a  majority  of  the  court  the  coupons 
in  question  do  riot  stand  upon  the  same  ground  as  chattels. 
They  were  negotiable  promises  for  the  payment  of  money, 
issued  by  the  Government,  payable  to  bearer  and  transfer 
able  by  mere  delivery,  without  assignment  or  indorsement. 
They  are  therefore  not  to  be  considered  as  goods,  but  as  rep 
resentatives  of  money,  and  subject  to  the  same  rules  as  bank 
bills  or  other  negotiable  instruments  payable  in  money  to 
bearer.  The  rule  o£  caveat  emptor  does  not  apply  to  them. 
It  is  now  well  settled  that  the  bearer  of  a  bank  bill  which 
has  been  stolen  from  the  bank  may  recover  the  amount  from 
the  bank,  unless  it  is  proved  that  he  did  not  take  it  in  good 
faith  and  for  a  valuable  consideration;  and  that  his  knowl 
edge  of  suspicious  circumstances  is  immaterial,  unless 
amounting  to  proof  of  want  of  good  faith."  (Spooner  v. 
Holmes,  102  Mass.,  503.) 

And  the  Supreme  Court  of  the  United  States  has  declared  coupons  detach, 
that—  ed  from 

"  Bonds  with  coupons,  payable  to  bearer,  are  negotiable 
securities,  and  pass  by  delivery,  and  in  fact  have  all  the 
qualities  and  incidents  of  commercial  paper.  It  is  not 
necessary  that  the  holder  of  coupons,  in  order  to  recover 
on  them,  should  own  the  bonds  from  which  they  are 
detached.  The  coupons  are  drawn  so  that  they  can  be 
separated  from  the  bonds,  and,  like  the  bonds,  are  nego 
tiable  ;  and  the  owner  of  them  can  sue,  without  the  produc- 


tfg  DESTROYED  AND  DEFACED  BONDS.    [CHAP.  IV. 

tion  of  the  bonds  to  which  they  are  attached,  or  without 
being  interested  in  them."  (Thomson  v.  Lee  County,  3 
Wallace,  331.) 

4. 

DESTROYED  AND  DEFACJD  BONDS. 

caveats  of  lost  Persons  often  forward  to  the  Treasury  Department  caveats 
and  stolen  bonds.  Qf  jQg£  an(j  gtolen  coupon  bonds,  but  the  only  advantage  gained 
thereby  is,  that  when  those  bonds,  or  the  coupons,  come  in 
for  redemption,  the  Department  notifies  the  claimants  who 
have  filed  the  caveats  of  the  presentation  of  the  bonds,  and 
furnishes  the  names  of  the  parties  presenting  them,  in  order 
that  the  loser  may  have  all  the  information  within  the  reach 
of  the  Government  which  may  possibly  enable  him  to  dis 
cover  the  parties  who  fraudulently  obtained  them.  Beyond 
this  the  Government  can  afford  no  relief. 

There  are  great  advantages  in  holders  carefully  taking 
the  numbers,  dates,  denominations,  issues,  and  series  of 
their  coupon  bonds,  and  preserving  them  in  some  place  apart 
from  the  bonds  themselves ;  because  in  case  of  destruction  of 
the  bonds,  by  fire  or  otherwise,  duplicates  may  be  obtained 
under  a  law  of  Congress  passed  June  1,  1872,  and  unless 
such  memoranda  are  kept,  it  is  difficult,  if  not  impossible, 
to  describe  coupon  bonds  which  have  been  destroyed,  with 
sufficient  accuracy  to  obtain  the  benefits  of  the  law.  The 
facts  as  to  the  title  of  registered  stock,  but  not  as  to  coupon 
bonds,  may  be  gathered  from  the  records  of  the  Department. 
The  following  is  the  law  for  the  issue  of  duplicates  of 
destroyed  or  defaced  bonds : 

AN    ACT  TO    PEOVIDE    FOE    THE    ISSUE    OF    BONDS    IN    LIEU    OF    DESTEOYED    OE 
DEFACED    BONDS   OF    THE   UNITED   STATES. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That 
whenever  it  shall  appear  to  the  Secretary  of  the  Treasury, 
by  clear  and  unequivocal  proof,  that  any  interest-bearing 
bond  of  the  United  States  has,  without  bad  faith  upon  the 
part  of  the  owner,  been  destroyed,  wholly  or  in  part,  or  so 
defaced  as  to  impair  its  value  to  the  holder,  and  which  bond 
shall  be  identified  by  number  and  description,  the  Secretary 


Numbers,  &c.,  of 
bonds  should  be 
taken  and  kept 
by  holders. 


Pefaopd  and  de 
stroyed  bonds. 


CHAP.  IV.]    DESTROYED  AND  DEFACED  BONDS.  67 

of  the  Treasury  shall,  under  such  regulations  and  with  such 
restrictions  as  to  time  and  retention  for  security  or  other 
wise  as  he  may  prescribe,  issue  a  duplicate  of  such  bond, 
having  the  same  time  to  run,  bearing  like  interest  as  the 
bond  so  proved  to  have  been  destroyed  or  defaced,  and  so 
marked  as  to  show  the  original  number  of  the  bond  destroyed 
and  the  date  thereof: 

Provided,  That  where  such  destroyed  or  defaced  bonds 
shall  appear  to  have  been  of  such  a  class  or  series  as  has 
been  or  may,,  before  such  application,  be  called  in  for  re 
demption,  instead  of  issuing  duplicates  thereof  they  shall 
be  paid,  with  such  interest  only  as  would  have  been  paid  if 
presented  in  accordance  with  such  call. 

SEC.  2.  That  the  owner  of  such  destroyed  or  defaced  bond 
shall  surrender  the  same,  or  so  much  thereof  as  may  remain, 
and  shall  file  in  the  Treasury  a  bond  in  a  penal  sum  double 
the  amount  of  said  destroyed  or  defaced  bond,  and  the  inter 
est  which  would  accrue  .thereon  until  the  principal  thereof 
is  due  and  payable,  with  two  good  and  sufficient  sureties, 
residents  of  the  United  States,  to  be  approved  by  the  Secre 
tary  of  the  Treasury,  with  condition  to  indemnify  and  save 
harmless  the  United  States  from  any  claim  upon  the  said 
destroyed  or  defaced  bond. 

Approved  June  1,  1872. 

This  act  applies  to  both  registered  and  coupon  bonds,   Applies  to  regis 
while  the  act  of  March  3,  1871,  printed  on  page  61,  applies  ^dc°up°n 
only  to  those  which  are  registered. 

The  regulations  and  instructions  of  the  Treasury  Depart-  Regulations  and 
ment  for  the  issue  of  duplicate  bonds  under  the  foregoing  mstructlons- 
act  are  the  same  as  those  under  the  law  for  the  issue  of 
duplicates  of  lost  registered  bonds,  which  are  set  forth  in 
full  on  pages  61-64.     Those  instructions  must  be  carefully 
followed,  specifying,  however,  whether  the  bonds  are  cou 
pon  or  registered. 

It  will  be  seen  that  the  law  makes  no  provision  for  the  Duplicates  of  lost 
issue  of  duplicates  of  lost  coupon  bonds,  as  it  does  of  those  coupon bonds not 

a  provided  for. 

which  are  registered,  for  the  reason  that  the  former  are 
payable  to  bearer  and  pass  by  delivery,  and  the  bona  fide 
holders  acquire  a  legal  title  thereto ;  while  as  to  the  latter,, 
the  lost  registered  bond,  like  a  certificate  of  shares  in  a 
corporation,  only  designates  the  owner,  and  the  record  of 
it  in  theKegister's  office,  where  alone  it  can  be  transferred, 
is  still  evidence  of  the  payee's  title. 


68 


Duplicates  of  de 
faced  bonds. 


CONVERSION  OF  COUPON  BONDS.       [CHAP.  IV. 

The  foregoing  act,  so  far  as  it  relates  to  defaced  bonds, 
seems  to  apply  especially  to  tho-e  which,  are  defaced  or  mu 
tilated  under  such  circumstances  or  in  such  manner  as  to 
excite  suspicions  of  their  genuineness,  or  as  to  render  it 
possible  that  there  may  be  other  claimants  thereto.  The 
provisions  of  the  last  clause  of  section  7  of  the  act  of  June 
30,  1864,  chapter  172,  were  sufficient  to  authorize  the  issue 
of  duplicates  for  bonds  which  were  so  mutilated,  defaced, 
or  indorsed  as  simply  to  render  their  acceptance  by  pur 
chasers  in  the  market  somewhat  objectionable,  on  account 
of  the  appearance  of  the  bonds,  but  without  raising  any  sus 
picions  against  their  genuineness  or  the  title  of  the  holder 
thereto.  That  law  is  as  follows: 

SEC.  7.  And  be  it  fur  flier  enacted,  That  *  *  *  * 
And  for  all  mutilated,  defaced,  or  indorsed  coupon  or  other 
bonds  presented  to  the  Department,  the  Secretary  of  the 
Treasury  is  authorized  to  issue,  upon  terms  and  under  regu 
lations  as  aforesaid,  and  in  substitution  therefor,  other  bonds 
of  like  or  equivalent  issues. 

When  new  bonds  are  issued  under  this  act  as  a  substitute 
for  those  which  are  mutilated,  defaced,  or  indorsed,  no  bond 
of  indemnity  is  required.  If  any  part  of  the  bonds  are 
missing,  duplicates  can  be  obtained  only  under  the  laws  and 
regulations  hereinbefore  set  forth. 


Conversion  of 
coupon  to  regis- 
tered  bonds. 


Law  of  Congr?hs. 


5. 


CONVERSION  OF  COUPON  BONDS  TO  REGISTERED  STOCK. 

Under  the  following  law  holders  of  coupon  bonds  can  have 
the  same  converted  into  registered  stock  of  the  same  loan, 
without  any  charge  therefor,  by  transmitting  them  to  the 
Secretary  of  the  Treasury  at  their  own  expense  and  request 
ing  such  exchange ;  but  registered  stock  cannot  be  converted 
into  coupon  bonds : 

ACT  OF  JUNE  30,  1864,  CHAPTER  172. 

SEC.  7.  And  be  it  further  enacted,  That  the  Secretary  of 
the  Treasury  is  hereby  authorized  to  issue,  upon  such  terms 
and  under  such  regulations  as  he  may  from  time  to  time 


CHAP.  IV.]    INTEREST  ON  REGISTERED  STOCK.  09 

prescribe,  registered  bonds  in  exchange  for,  and  in  lieu 
of,  any  coupon  bonds  which  have  been  or  may  hereafter 
be  lawfully  issued ;  such  registered  bonds  to  be  similar 
in  all  respects  to  the  registered  bonds  issued  under  the 
acts  authorizing  the  issue  of  the  coupon  bonds  offered  for 
exchange. 

6. 

PAYMENT  OF  INTEREST  ON  REGISTERED  STOCK. 

The  following  are  the  rules  of  the  Treasury  Department  interest  on  regis 
in  relation  to  the  payment  of  interest  on  registered  bonds :   l 

Payment  of  interest. 

Holders  of  registered  stock  of  all  loans  but  the  funded  loan  —where  payable, 
of  1881,  must  select  one  of  the  following  offices  at  which  to 
receive  their  interest. 

It  is  payable  to  the  holder  on  application  in  person  or  by 
attorney. 

The  place  of  payment  will  be  changed  on  notice  in  writ 
ing  from  the  holder,  if  sent  to  the  Register  of  the  Treasury 
before  the  transfer  books  are  closed. 

The  Treasury  of  the  United  States  at  Washington,  D.  C.   Dividend  offices 

The  Assistant  Treasury  at  Boston,  Massachusetts. 

The  Assistant  Treasury  at  New  York,  New  York. 

The  Assistant  Treasury  at  Philadelphia,  Pennsylvania. 

The  Assistant  Treasury  at  Baltimore,  Maryland. 

The  Assistant  Treasury  at  Charleston,  South  Carolina. 

The  Assistant  Treasury  at  New  Orleans,  Louisiana. 

The  Assistant  Treasury  at  St.  Louis,  Missouri. 

The  Assistant  Treasury  at  San  Francisco,  California. 

The  Designated  Depository  at  Buffalo,  New  York. 

The  Designated  Depository  at  Pittsburg,  Pennsylvania. 

The  Designated  Depository  at  Cincinnati,  Ohio. 

The  Designated  Depository  at  Chicago,  Illinois. 

In  case  stock  is  transferred  between  the  day  for  closing  the  interest  on  stor-k 
dividend  books  and  the  day  it  becomes  due,  the  interest  is  assigned  while 
declared  to  the  registered  payee,  and  the  purchaser  must  look  transfer  hooks 

i   •        /»        ,  i      ,   •  R  L     J  "re  closed. 

to  him  for  that  interest. 

On  the  funded  loan  of  1881,  registered  interest  is  payable  interest  on  fund- 

by  check  of  the  Treasurer  to  the  order  of  the  holder  or  his  ed  loan  pay^ie 

attorney.  by  cheeks. 

These  checks  vT;ili  be  sent  by  mail,  when  the  correct  post- 
office  address  is  known,  otherwise  they  will  be  held  by  the 


PAYMENT  OF  COUPONS. 


[CHAP.    IV. 


Interest  on 
stocks  of  joint 
holders. 


Interest  not 
claimed  for  nine 
ty  days,  how  col 
lected. 


Dividend  officers 
to  deposit  un 
claimed  interest 
at  once,  &c. 


Treasurer  until  called  for.  They  are  payable,  when  prop 
erly  indorsed,  on  presentation  at  any  one  of  the  above-named 
offices. 

Holders  of  this  stock  should  notify  the  Register  of  the 
Treasury  of  any  change  in  their  address. 

Interest  will  be  paid  to  any  one  of  several  joint  holders, 
or  co-trustees,  executors,  administrators,  or  guardians,  but 
in  the  execution  of  a  power  to  a  third  party  to  collect  all 
must  join:  In  case  of  the  death  of  either,  the  survivors  will 
be  recognized  as  having  full  authority,  upon  due  proof  of 
Kiich  death  and  survivorship.  The  same  rule  will  govern 
at  the  final  redemption  of  a  loan. 

If  the  interest  on  registered  stock  of  the  old  loans  is  not 
claimed  within  ninety  days  after  interest  day,  it  will  be  re 
turned  to  the  Treasury  as  unclaimed,  and  must  then  be  col 
lected  in  person  or  by  attorney,  at  the  office  of  the  Treasurer 
in  Washington. 

For  the  convenience  of  the  public,  powers  to  collect  speci 
fied  unclaimed  interest  may  be  made  in  favor  of  the  "Chief 
of  the  Loan  Division  of  the  Secretary's  office,"  and  be  sent 
by  mail  to  the  Secretary  of  the  Treasury.  It  will  then  be 
collected,  and  a  check  for  the  amount  will  be  sent  by  mail. 

Deposits  of  unclaimed  interest  should  be  promptly  made 
by  the  several  dividend  offices  at  the  expiration  of  the  ninety 
days.  The  certificates  of  deposit  should  specifically  state 
why  the  interest  is  deposited,  and  to  what  loan  account  it 
belongs.  If  on  account  of  several  loans,  the  amount  to  each 
must  be  stated.  The  information  must  be  full  and  explicit^ 
and  should  be  indorsed  on  the  back  of  the  original  certifi 
cate,  which  should  be  at  once  forwarded  to  the  Secretary  of 
the  Treasury,  t^ie  depositor  retaining  the  duplicate. 


Powers  of  attor 
ney  to  collect  in 
terest. 


Powers  of  attorney  to  collect  interest  on  registered  bonds 
are  required  to  be  in  the  same  general  form,  must  be  ac 
knowledged,  and  are  subject  to  the  rules  and  instructions 
applicable  to  powers  to  assign  and  transfer  certificates  of 
stock,  as  given  on  pages  59,  60. 


•       T. 
PAYMENT  OF  COUPONS. 


Payment  of  cou-  Coupons  are  paid  by  the  Treasurer  of  the  United  States  at 
Washington,  by  either  of  the  Assistant  Treasurers  or  Desig 
nated  Depositaries  named  on  page  69,  where  interest  on  reg- 


CHAP.  IV.]        INTEREST  BEFORE  MATURITY. 

istered  stock  is  payable,  and  also  by  the  Designated  Deposit 
aries  at  Mobile,  Alabama ;  Louisville,  Kentucky ;  Santa  Fe, 
New  Mexico;  and  Tucson,  Arizona  Territory,  at  the  option 
of  holders.  * 

For  the  regulations  of  the  Department  in  relation  to  the 
payment  of  coupons  on  bonds  called  in  for  redemption, 
when  only  a  fractional  part  of  the  coupon  is  payable,  see 
Chapter  V. 

8. 
PAYMENT  OF  INTEREST  BEFORE  MATURITY. 


The  Secretary  of  the  Treasury  has  authority  1:  pay,  and  Payment  of  in- 
often  does  pay,  coupons  and  interest  on  registered  stock  in  oTmlYm-ttyVanCe 
advance  of  maturity.     When  the  time  of  payment  is  onlv  a 
few  days  in  advance,  the  whole  amount  is  paid  without  re 
bate,  but  for  longer  periods  of  time  a  proportional  rebate 
has  been  made.     No  interest  is  subject  to  rebate  which  is 
not  voluntarily  applied  for  before  maturity. 

Previous  public  notice  is  always  given  in  each  case  of  the 
intention  of  the  Government  to  make  advance  payments  at 
any  designated  time. 

The  following  is  the  law  of  Congress  under  which  pay-  Law  for  advanced 
ment  of  interest  is  thus  anticipated,  being  chapter  20  of  the  paym< 
Kesolutions  of  the  year  1864  : 

JOINT    RESOLUTION    TO  AUTHORIZE   THE  SECRETARY  OF  THE  TREASURY  TO  ANTI 
CIPATE    THE    PAYMENT   OF    INTEREST  ON   THE   PUBLIC  DEBT,  AND   FOR   OTHER 

PURPOSES. 

Be  it  resolved  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That 
the  Secretary  of  the  Treasury  be  authorized  to  anticipate 
the  payment  of  interest  on  the  public  debt,  by  a  period  not 
exceeding  one  year,  from  time  to  time,  either  with  or  without 
a  rebate  of  interest  upon  the  coupons,  as  to  him  may  seem 
expedient. 

Approved  March  17,  1864. 

There  is  a  standing  order  of  the  Treasury  Department  standing  order 
that  coupons  will  be  paid  on  presentation  sixty  days  before  for  Pa>'rnf nt  of 

J  A  p  *  *  coupons  in  ad- 

nmturity,  upon  a  rebate  of  interest  at  the  rate  of  six  per  vance  on  rebate 
cent,  per  annum  in  gold. 


72 


SALE  OF  GOLD,  PURCHASE  OF  BONDS.  [CHAP.  V. 


CHAPTER  V. 

COIN  IN  THE  TREASURY;  SALE  OF  GOLD;  PURCHASE  OF  BONDS; 
REDEMPTION  OF  BONDS;  MONTHLY  DEBT  STATEMENT. 


1.  Coin  in  the  Treasury.       *' 

2.  Sale  of  gold  and  purchase  of  bonds. 


3.  Payment  and  redemption  of  bonds. 

4.  Monthly  debt  statement. 


Coin  kept  in  the 
Treasury. 


1. 

COIN  IN  THE  TREASURY. 

The  coin  received  from  duties  on  imports  has  every  year 
been  more  than  the  amount  necessary  for  the  payment  of 
interest  on  the  public  debt  and  the  principal  of  that  portion 
which  has  matured  during  the  same  period,  and  for  other  dis 
bursements  of  the  Government  required  to  be  paid  in  specie ; 
and  from  seventy  to  a  hundred  millions  of  dollars  have  been 
constantly  kept  in  the  Treasury  for  several  years  past,  under 
different  Secretaries,  as  a  reserve,  to  be  used  at  times  when 
the  exigencies  of  the  Government  should  require  it. 


Authority  to  sell 
gold. 


—to  buy  bonds. 


2. 


SALE  OF  GOLD  AND  PURCHASE  OF  BONDS. 

Congress,  by  joint  resolution  of  March  17,  1864,  author 
ized  the  Secretary  of  the  Treasury  "to  dispose  of  any  gold 
in  the  Treasury  of  the  United  States  not  necessary  for  the 
payment  of  interest  of  the  public  debt :  Provided,  That  the 
obligation  to  create  the  sinking  fund,  according  to  the  act 
of  February  twenty-fifth,  eighteen  hundred  and  sixty-two, 
shall  not  be  impaired  thereby." 

And  by  act  of  July  11,  1862,  chapter  142,  section  1,  the 
Secretary  of  the  Treasury  was  authorized  to  "purchase,  at 
rates  not  exceeding  that  of  the  current  market  and  cost  of 


CHAP.  V.]  SALE  OF  GOLD,  PURCHASE  OP  BONDS. 


73 


purchase  not  exceeding  one-eighth  of  one  per  centum, 
any  bonds  or  certificates  of  debt  of  the  United  States, 
as  he  might  deem  advisable/'  The  act  of  March  3,  1863, 
chapter  73,  section  3,  repealed  so  much  of  the  act  of  July 
11,  1862,  and  another  act,  as  restricted  the  "negotiation 
of  bonds"  to  market  value,  and  if  that  applies  to  the  pur 
chase  of  bonds,  it  allows  the  Secretary  to  buy  at  any 
price. 

It  has  been  the  invariable  practice  of  the  Department  HOW  gold  is  * 
since  March,    1869,  to  sell    gold  and  purchase  bonds  in  p^cha^r''' 
the  open  market,  and  only  through  the  Assistant  Treas 
urer  at  New  York,  on  proposals  invited  from  the  public 
by  notifications  in  the  newspapers.     Within  a  few  days 
of  the  close  of  each  month   the  Secretary  sends  written 
instructions  to  the  Assistant  Treasurer   at  New  York  as 
to  the  amount  of  gold  to  be  sold  and  bonds  to  be  pur 
chased  during  the  then  next  month,  specifying  the  dates 
of  purchases  and  sales,  and  the  amounts  of  each. 

The  purchase  of  bonds  always  takes  place  on  Wednesday 
and  the  sale  of  gold  on  Thursday,  so  that  currency  may  be 
paid  out  of  the  Treasury  for  bonds  before  it  is  required  for 
the  payment  of  gold  purchased. 

The  Assistant  Treasurer  publishes  in  the  newspapers  a  Public  notice 
notice  inviting  proposals  in  the  following  form,  only  vary 
ing  the  dates  and  amounts  each  month  according  to  the 
direction  of  the  Secretary: 

OFFICE  OF  U.  S.  ASSISTANT  TREASURER, 

NEW  YORK,  June  3, 1872. 

During  the  month  of  June,  1872,  I  shall,  by  order,  re 
ceive  bids  for  gold,  and  offers  of  bonds  as  follows  : 


Bids  for  gold. 

Thursday,  June    6, millions. 

Thursday,  June  13, millions. 

Thursday,  June  20, millions. 

Thursday,  June  27, millions. 


Offers  of  bonds. 

Wednesday,  June    5, millions. 

Wednesday,  Juno  12, millions. 

Wednesday,  June  19, millions. 

Wednesday,  Jane  26, millions. 

A  certified  check  for  five  per  cent,  of  bid  or  offer  must 
be  deposited  therewith.  Proposals  will  be  opened  at  12 
o'clock,  noon,  each  day  specified.  The  Treasury  may,  at 
its  option,  accept  offers  of  bonds  or  bids  for  gold  in  excess 
of  the  amount  advertised  for. 


SALE  OF  GOLD,  PURCHASE  OF  BONDS.   [CHAP.  V. 

I'mited  forms  for  proposals,  with  regulations  to  bo  ob 
served,  will  be  furnished  at  this  office. 

THOMAS  HILLHOUSE, 
Assistant  Treasurer  U.  S. 


The  regulations  and  form  of  proposals  referred  to  in  the 
notice  are  as  follows  : 

Purchase  of  bonds. 

Proposals  must  be  for  not  less  than  five  thousand  dollars, 
and  must  state  the  kind  of  bonds  offered,  whether  coupon 
or  registered,  and  of  what  loan  and  issue. 

Proposals  must  specify  the  price  desired,  in  currency,  for 
the  principal  of  the  bonds  only,  without  regard  to  the  ac 
crued  coin  interest  which  will  be  paid  on  purchased  bonds 
to  the  date  of  purchase. 

The  payment  will  be  in  United  States  or  national  bank 
notes,  as  the  convenience  and  condition  of  the  Treasury  may 
warrant. 

The  interest  on  the  purchased  bonds  will  cease  from  the 
date  of  purchase. 

Bonds  purchased  must  be  delivered,  in  all  cases,  the  day 
following  the  award.  In  case  of  failure  to  deliver  the  bonds 
within  the  time  specified,  they  will  be  purchased  in  the  open 
market  for  account  of  the  sellers. 

Bonds  will  be  received  at  this  office  and  paid  for,  subject 
to  examination  by  the  Department  at  Washington,  and  if 
rejected  the  sellers  will  be  required  to  substitute  other  ac 
ceptable  bonds. 

Bonds  rejected  by  the  Department  as  counterfeit,  or  for 
fraudulent  alterations  or  transfers,  of  whatever  nature,  will 
be  retained,  without  prejudice  to  the  right  of  the  Depart 
ment  to  require  the  substitution  therefor,  by  the  seller,  of 
other  acceptable  bonds. 

Proposals  must  be  plain,  specific,  and  free  from  any  era 
sures  or  alterations  likely  to  lead  to  misunderstanding. 

Proposals  adverse  to  the  interest  of  the  Government  will 
be  rejected. 

Each  proposal  must  contain  a  certified  check  for  five  per 
cent,  of  the  amount  offered.  When  proposals  are  rejected, 
the  checks  will  be  returned  as  soon  as  the  awards  are  deter 
mined  upon.  If  proposals  are  accepted,  the  checks  will  be 
returned  on  completion  of  the  delivery  of  the  bonds. 

In  all  proposals  for  the  sale  of  bonds,  it  must  be  distinctly 
stated  that  they  are  made  subject  to  the  foregoing  regula 
tions  and  conditions. 


CHAP.  IV.  J  REDEMPTION  OF  BONDS.  ffj 

Suitable  forms  will  be  furnished  on  application  at  this 
office. 

Sales  of  gold. 

Proposals  must  be  for  sums  not  less  than  five  thousand 
dollars. 

Payment  majr  be  made  in  lawful  money  or  three  per  cent. 
certificates. 

Each  proposal  must  contain  a  certified  check  for  five  per 
cent,  of  the  amount  bid  for. 

Proposals  adverse  to  the  interest  of  the  Government  will 
be  rejected. 

The  proposals  will  be  opened  at  12  M.  on  the  days  an 
nounced  for  purchases  and  sales. 

The  right  is  reserved  to  accept  more  or  less  than  the 
amount  advertised  for,  either  of  bonds  or  gold. 

Form  of  proposal. 

NEW  YORK,  ,  187—.          Form  of  proposal. 

To  the  ASSISTANT  TREASURER  U.  S., 

New  York. 

SIR  :  In  accordance  with  the  terms  of  your  advertisement, 
and  subjected  to  the  annexed  conditions,  the  following  offer 
-  is  submitted. 
Very  respectfully.  . 

Proposals  when  opened  are  immediately  telegraphed  to  the  secretary  deter- 
Secretary  of  the  Treasury  at  Washington,  and  the  amount  ^InTpT*  °f 
to  be  sold  or  purchased  on  each  occasion  is  decided  by  him  chases  on  each 
and  telegraphed  back  to  the  Assistant  Treasurer,  who  an 
nounces  the  same  at  once. 

3. 
PAYMENT  AND  REDEMPTION  OF  BONDS. 

In  the  bonds  of  the  United  States  a  distinction  is  made  Distinction  be- 
between   "redeemable"   and  " payable."     They  are  "re-  ^iT' 
deemable"  when  the  Government  has  the  option  to  pay  able." 
them  or  to  let  them  remain  outstanding  with  the  interest 
running  thereon,  and  "payable"  when  they  are  fully  ma 
tured  and  payable  on  presentation  at  the  Treasury,  at  which 
time  they  cease  to  bear  interest.     Some  bonds  are  redeem 
able  at  the  pleasure  of  the  Government  after  a  date  fixed 


76 


REDEMPTION  OF  BONDS. 


[CHAP.  V. 


Payment  of  ma 
tured  bonds. 


Calling  in  5-20 
bonds  for  re 
demption. 


Payment  ol  frac 
tions  of  coupons 
on  called  bonds. 


therein,  and  some  between  certain  stated  times  at  the  ex 
piration  of  which  they  become  payable,  and  others  are  pay 
able  at  a  fixed  day  certain,  as  stated  in  the  account  of  the 
several  outstanding  loans  in  Chapter  I. 

When  the  principal  of  any  bonds  becomes  payable,  either 
by  maturity  of  the  bonds  or  by  reason  of  their  being  called 
in  for  redemption,  they  are  paid  only  by  the  Treasurer  of 
the  United  States  at  Washington,  to  whom  they  must  be 
forwarded,  and  who  pays  the  same  in  coin  or  in  coin  checks 
on  the  Assistant  Treasurer  at  New  York  city,  as  the  parties 
presenting  the  bonds  desire. 

The  act  of  July  14,  1870,  chapter  256,  for  refunding  the 
national  debt,  makes  the  following  provisions  for  calling  in 
the  five-twenty  bonds  for  redemption: 

SEC.  4.  And  be  it  further  enacted,  Tbat  the  Secretary  of 
the  Treasury  is  hereby  authorized,  with  any  coin  in  the 
Treasury  of  the  United  States  which  he  may  lawfully  apply 
to  such  purpose,  or  which  may  be  derived  from  the  sale  of 
any  of  the  bonds,  the  issue  of  which  is  provided  for  in  this 
act,  to  pay  at  par  and  cancel  any  six  per  cent,  bonds  of  the 
United  States  of  the  kind  known  as  five-twenty  bonds,  which 
have  become  or  shall  hereafter  become  redeemable  by  the 
terms  of  their  issue. 

But  the  particular  bonds  so  to  be  paid  and  canceled  shall 
in  all  cases  be  indicated  and  specified  by  class,  date,  and 
number,  in  the  order  of  their  numbers  and  issues,  begin 
ning  with  the  first  numbered  and  issued,  in  public  notice 
to  be  given  by  the  Secretary  of  the  Treasury,  and  in  three 
months  after  the  date  of  such  public  notice  the  interest  on 
the  bonds  so  selected  and  advertised  to  be  paid  shall  cease. 

By  the  first  three  calls  under  this  law  the  three  months 
notice  fixed  for  redemption  of  the  bonds  expired  before  the 
coupons  thereon  for  the  current  six  months  became  payable, 
so  that  to  each  bond  there  was  one  coupon  upon  which  only 
a  fraction  of  the  nominal  amount  was  due.  These  coupons 
are  often  detached  by  the  holders  of  the  bonds  and  pur 
chased  by  dealers  at  their  face  value  without  either  party 
noticing  the  fact  of  the  bonds  being  called  in  for  redemption. 

This  must  occur  in  like  manner  in  future  calls,  and  in 
order  to  prevent  persons  from  being  defrauded  by  such 
errors,  and  to  save  the  rights  and  equities  of  all  parties  buy- 


CHAP.  V.]         MONTHLY  DEBT  STATEMENT.  77 

ing  and  selling  coupons,  the  Secretary  of  the  Treasury  has 
made  the  following  regulations: 

When  coupons,  detached  from  bonds  that  have  heen  called 
in  for  redemption,  are  presented  for  payment,  the  Depart 
ment  will  pay  such  portion  of  the  interest  specified  in  such 
coupons  as  had  accrued  at  the  day  fixed  in  the  call  for  the 
redemption  of  the  bonds,  and  no  more,  unless  the  party 
presenting  them  claims  payment  of  their  nominal  value.,  in 
which  case  the  Department  will  retain  the  coupons  until  the 
bonds  from  which  they  were  detached  shall  have  been  pre 
sented,  and  the  conflicting  claims  adjusted. 

When  a  called  bond  is  presented  for  redemption,  from 
which  a  coupon,  maturing  after  the  day  fixed  in  the  call 
for  such  redemption,  shall  have  been  detached,  the  nominal 
value  of  such  coupon  shall  be  deducted  from  the  sum  due 
upon  the  bond,  unless  the  coupon  shall  have  been  paid  as 
above ;  the  surn  thus  deducted  to  be  retained  to  await  the 
presentation  of  the  coupon  and  a  settlement. 

The  bonds  of  the  Funded  Loan,  all  of  which  are  redeem-  calling  in  and 
able  at  the  pleasure  of  the  United  States  after  a  fixed  time,  PJ™^L™n 
when  called  in  for  payment,  are  required  by  law  to  be  called  to  begin  with 
in  reverse  order  to  the  five-twenty  bonds ;  that  is,  beginning 
with  those  last  issued  and  numbered,  so  that  the  bond  first 
issued  will  be  last  paid.     In  other  respects  the  same  rules 
apply  alike  to  each  class  of  bonds.  For  the  law  see  page  9. 


4. 

MONTHLY  DEBT  STATEMENT. 

On  the  first  day  of  each  month  the  Secretary  of  the  Treas-  contents  of 
ury  publishes  a  complete,  carefully  prepared,  and  thoroughly 
accurate  statement  of  the  whole  public  debt,  as  it  appears 
upon  the   books  of  the  Department  on  that  day,  setting 
forth— 

First.  DEBT  BEARING  INTEREST  IN  COIN,  under  which  is  given 
the  title  of  each  outstanding  loan  not  matured,  dates  of  acts 
of  authorization,  rate  of  interest,  when  the  principal  is  re 
deemable  and  payable,  times  of  payment  of  interest,  amount 
of  registered  bonds,  amount  of  coupon  bonds,  total,  interest 
due  and  unpaid,  and  accrued  interest. 


78  MONTHLY  DEBT  STATEMENT.          [CHAP.  V. 

Second.  DEBT  BEARING  INTEREST  IN  LAWFUL  MONEY,  includ 
ing  the  three  per  cent,  certificates,  navy  pension  fund,  and 
certificates  of  indebtedness  of  1870. 

Third.  DEBT  ON  WHICH  INTEREST  HAS  CEASED  SINCE  MATURITY. 
Under  this  head  are  included  the  balances  of  all  loans  ma 
tured  or  called  in  for  redemption  and  not  presented  for  pay 
ment,  specifying  each  by  the  title  of  the  loan,  except  those 
matured  prior  to  1837,  which  are  combined  in  one  item. 

Fourth.  DEBT  BEARING  NO  INTEREST,  giving  the  amount  of 
United  States  notes,  fractional  currency,  coin  certificates, 
certificates  of  deposit,  and  unclaimed  interest. 

To  which  is  added  a  RECAPITULATION,  with  a  statement  of 
the  amount  of  coin  and  currency  in  the  Treasury,  the  amount 
of  reduction  of  the  debt  during  the  preceding  month  and 
other  periods  of  time,  and  an  account  of  BONDS  ISSUED  TO  THE 
PACIFIC  RAILWAY  COMPANIES. 

circulation  of  This  monthly  debt  statement  is  printed  on  sheets  and  for- 

warded  by  mail  to  all  journalists,  bankers,  brokers,  and 
other  persons  in  this  country  and  Europe  who  request  copies, 
or  who  are  known  to  desire  them,  as  well  as  to  Government 
officials  at  home  and  abroad,  for  distribution,  and  is  so  ex 
tensively  circulated  throughout  the  United  States  that  every 
citizen  may  easily  know  each  month  the  exact  condition  of 
the  national  debt. 


CIIAP.  VI  ]  PAYMENT  IN  COIN.  79 


CHAPTER   VI. 


OBLIGATION  TO  PAY  PRINCIPAL  AND  INTEREST  IN  COIN;  SINK- 
ING  FUND  AND  TAXATION  OF  BONDS. 


1.  Payment  in  coin. 

2.  Sinking  fund. 


3.  Taxation  of  United  States  bonds  and 
other  obligation 


1. 

PAYMENT  IN  COIN. 

All  the  bonds  of  the  United  States,  both  coupon  and  Terms  of  the 
registered,  of  loans  mentioned  in   Chapter  I,  as  well  as  b 
of  other  loans  heretofore  paid  in  coin,  express  on  the  face 
thereof  the  promise  of  the  Government  to  pay  a  certain 
amount  of  dollars  with  interest  at  the  rate  stated,  without 
in  any  case  specifying  what  kind  of  dollars  are  intended 
thereby,  or  in  what  money,  whether  coin  or  currency,  either 
the  principal  or  interest  is  payable. 

Of  the  loans  created  before  the  passage  of  the  act  of  Loans  before 
February  25,  1862,  chapter  33,  which  first  authorized  the  Feb™«y  as,  wca 
issue  of  legal-tender  notes,  payment  could  never  have  been 
contemplated  at  the  time  of  negotiation  in  any  dollars  other 
than  coin,  as  none  other  then  formed  the  currency  of  the 
country  which  public  or  private  creditors  were  obliged  to 
accept.     The  language  of  the  Supreme  Court  of  the  United 
States,  in  Bank  v.  Supervisors,  (7  Wallace,  26,)  is  as  appli 
cable  to  these  bonds  as  to  the  notes  to  which  it  refers: 

"  Every  one  of  them  expresses  upon  its  face  an  engage 
ment  of  the  nation  to  pay  to  the  bearer  a  certain  sum.  The 
dollar  note  is  an  engagement  to  pay  a  dollar,  and  the  dollar 
intended  is  the  coined  dollar  of  the  United  States ;  a  certain 
quantity  in  weight  and  fineness  of  gold  or  silver,  authenti 
cated  as  such  by  the  stamp  of  the  Government.  No  other 
dollars  had  before  been  recognized  by  the  legislation  of  the 
national  Government  as  lawful  money." 


80  PAYMENT  IN  COIN.  (CiiAi-.  VI, 

Under  the  net  of  The  act  of  February  25,  1802,  section  1,  authorizing  the 
issue  of  United  States  notes,  provided  that  they  should  be 
receivable  in  payment  of  "all  claims  and  demands  against 
the  United  States  of  every  kind  whatsoever  except  for  in 
terest  upon  bonds  and  notes_,  which  shall  be  paid  in  coin ;" 
and  that  they  should  be  "lawful  money  and  a  legal  tender 
in  payment  of  all  debts,  public  and  private,  within  the 
United  States,  except  duties  on  imports  and  interest  as 
aforesaid." 

The  subsequent  laws,  increasing  the  issue  of  notes  and 
making  them  in  like  manner  a  legal  tender,  contain  the 
same  exceptions. 

The  same  act,  by  section  2,  authorized  the  issue  of  five 
hundred  millions  dollars  of  bonds,  "Five-twenties  of  1862," 
and,  by  section  5  enacted,  that  the  duties  on  imports  should 
be  paid  in  coin,  part  of  which  should  be  set  aside  as  a  spe 
cial  fund,  to  pay  in  coin  the  interest  on  the  bonds  and  notes 
of  the  United  States  and  to  establish  a  sinking-fund  for 
the  purchase  or  payment  of  the  public  debt. 

-under other  The  act  of  March  3,  1863,  chapter  73,  authorizing  the 

loan  of  that  date,  expressly  provided  that  the  principal  and 
interest  of  the  bonds  issued  thereunder  should  be  payable 
in  coin;  and  so  did  the  act  of  March  3,  1864,  chapter  IT, 
under  which  the  "Ten-forty"  loan  and  the  "Five-twenty 
loan  of  March,  1864,"  were  issued. 

The  act  of  June  30,  1864,  chapter  172,  which  authorized 
the  "Five-twenty  loan  of  June,  1864,"  provided  that  the 
interest  should  be  payable  in  coin,  without  any  mention  of 
what  kind  of  money  the  principal  should  be  payable  in. 
The  act  of  March  3,  1865,  chapter  77,  under  which  were 
issued  the  "Five-twenties  of  1865"  and  all  the  "Consols 
of  1865,  1867,  and  1868,"  authorizing  the  issue  of  both 
bonds  and  treasury  notes,  provided  that  the  "principal  or 
interest,  or  both,  may  be  made  payable  in  coin  or  in  lawful 
money;"  "that  the  rate  of  interest  on  any  such  bonds  or 
treasury  notes,  when  payable  in  coin,  shall  not  exceed  six 
per  centum  per  annum ;  and  when  payable  in  currency  shall 
not  exceed  7y3Q-  per  centum  per  annum,  and  the  rate  and 
character  of  interest  shall  be  expressed  on  all  such  bonds 


Ciwr.  VI.]  PAYMENT  IN  COIN.  Kl 

or  treasury  notes."  The  bonds  issued  by  authority  of  each 
of  these  acts  were  made  payable  in  dollars,  both  principal 
and  interest,  without  specifying  coin  or  currency,  while 
the  treasury  notes  were  invariably  made  payable  on  the 
face  thereof  in  currency  or  lawful  money. 

Thus  the  construction  of  the  Treasury  Department,  con-  cortemporane- 
temporaneous  with  the  issue  of  the  bonds,  seems  to  have  OU5"™8t™ctio°- 
been  that,  when  not  otherwise  expressly  provided  in  the 
bonds  themselves,  both  the  principal  and  interest  were 
payable  in  coin;  and  this  construction  has  been  strictly 
followed  and  maintained  by  the  Government  by  the  prompt 
and  faithful  payment  of  every  such  bond  in  coin  at  maturity. 
And  the  question  has  been  further  settled  by  legislation,  so 
far  as  subsequent  legislation  can  affect  it,  by  the  passage  of 
a  law,  which  was  the  first  act  of  a  general  nature  signed  by 
President  Grant  upon  his  accession  to  the  Presidency,  only 
fourteen  days  after  his  inauguration,  and  was  an  emphatic 
••expression  of  the  sentiment  of  the  people  of  the  country, 
uttered  by  a  new  Congress  then  recently  elected  and  just 
commencing  its  first  session.  The  following  is  a  copy  of 
the  law : 

ACT  OF  1869,  CHAPTER  1. 

AN  ACT  TO  STRENGTHEN  THE  PUBLIC  CREDIT. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  Act  to  strengthen 
of  the  United  States  of  America  in  Congress  assembled,  That  the  Pnblic  credit- 
in  order  to  remove  any  doubt  as  to  the  purpose  of  the  Gov 
ernment  to  discharge  all  just  obligations  to  the  public  cred 
itors,  and  to  settle  conflicting  questions  and  interpretations 
of  the  laws  by  virtue  of  which  such  obligations  have  been 
contracted,  it  is  hereby  provided  and  declared  that  the  faith 
of  the  United  States  is  solemnly  pledged  to  the  payment  in 
coin  or  its  equivalent  of  all  the  obligations  of  the  United 
States  not  bearing  interest,  known  as  United  States  notes, 
and  of  all  the  interest-bearing  obligations  of  the  United 
States,  except  in  cases  where  the  law  authorizing  the  issue 
of  any  such  obligation  has  expressly  provided  that  the  same 
may  be  paid  in  lawful  money  or  other  currency  than  gold 
and  silver.  But  none  of  said  interest-bearing  obligations 
rot  already  due  shall  be  redeemed  or  paid  before  maturity 
unless  at  such  time  United  States  notes  shall  be  convertible 
into  coin  at  the  option  of  the  holder,  or  unless  at  such  time 
6 


82  SINKING  FUND.  [CHAP.  VI. 

bonds  of  the  United  States  bearing  a  lower  rate  of  interest 
than  the  bonds  to  be  redeemed  can  be  sold  at  par  in  coin. 

And  the  United  States  also  solemnly  pledges  its  faith  to 
make  provision  at  the  earliest  practicable  period  for  the 
redemption  of  the  United  States  notes  in  coin. 

J.  Gr.  ELAINE, 
Speaker  of  the  House  of  Representatives . 

SCHUYLER    COLFAX, 

Vice  President  of  the  United  States  and  Pres 
ident  of  the  Senate- 
Approved  March  18,  1869. 
U.  S.  GRANT. 

Funded  Loan  ex-  To  avoid  all  possible  question  as  to  the  meaning  of  the 
d°llars  mentioned  in  the  " Funded  Loan,"  the  act  of  July 
14,  18*70,,  which  authorized  its  issue,  expressly  provides  that 
the  bonds  shall  be  redeemable  in  coin  at  its  then  standard 
value;  that  the  interest  shall  be  payable  in  sucli  coin,  and 
that  those  conditions  shall  be  set  forth  and  expressed  upon 
the  face  of  the  bonds.  The  obligation  to  pay  in  coin  of  a 
fixed  standard  value,  being  thus  expressed  in  the  law  and 
in  all  the  bonds  themselves,  enters  into  and  forms  part  of 
the  original  contract  with  the  holders  of  these  securities, 
and  can  never  be  questioned. 


SINKING  FUND. 

of  -Confess,       This  fund  is  required  to  be  maintained  by  the  following 
provisions  of  the  act  of  February  25,  1862: 

SEC.  5.  And  be  it  further  enacted.  That  all  duties  on  im 
ported  goods  shall  be  paid  in  coin,  or  in  notes  payable  on 
demand  heretofore  authorized  to  be  issued  and  by  law  re 
ceivable  in  payment  of  public  dues,  and  the  coin  so  paid 
shall  be  set  apart  as  a  special  fund,  and  shall  be  applied  as 
follows : 

First.  To  the  payment  in  coin  of  the  interest  on  the  bonds 
.and  notes  of  the  United  States. 

Second.  To  the  purchase  or  payment  of  one  per  centum 
of  the  entire  debt  of  the  United  States,  to  be  made  within 
each  fiscal  year  after  the  first  day  of  July^  eighteen  hun 
dred  and  sixty-two,  which  is  to  be  set  apart  as  a  sinking 


CHAP.  VI.} 


SINKING  FUND. 


83 


Fund  not  com- 
™eneed  during 

In©  wnr. 


fund,  and  the  interest  of  which  shall  in  like  manner  be  ap 
plied  to  the  purchase  or  payment  of  the  public  debt  as  the 
Secretary  of  the  Treasury  shall  from  time  to  time  direct. 

Third.  The  residue  thereof  to  be  paid  into  the  Treasury 
of  the  United  States. 

Congress,  by  joint  resolution  of  March  17,  1864,  chapter 
20,  gave  the  Secretary  of  the  Treasury  permission  to  sell 
gold  in  the  Treasury,  but  added  a  proviso  that  the  obliga 
tion  to  create  the  sinking  fund,  according  to  the  act  of  Feb 
ruary  25,  1862,  should  not  be  impaired. 

During  the  continuance  of  the  war  of  the  Rebellion,  while 
the  Government  was  still  borrowing  money,  and  was  pay- 
ing  old  loans  and  creating  new  ones,  no  steps  were  taken 
to  establish  the  sinking  fund  as  such,  but  the  coin  in  the 
Treasury  was  allowed  to  accumulate  to  about  one  hundred 
millions  of  dollars. 

Upon  the  coming  in  of  the  administration,  of  President   First  put  in  oper- 
Grant,  in  March,  1869,  his  Secretary  of  the  Treasury,  Hon. 
George  S.  Boutwell,  immediately  commenced  'the  sinking 
fund,  in  literal  compliance  with  the  law  of  Congress. 

Within  each  fiscal  year,  which  ends  June  30,  the  Secre 
tary  applies  coin  received  from  duties  to  the  purchase  of 
bonds  to  the  amount  of  one  per  cent,  of  the  entire  debt  of 
the  United  States. 

The  bonds  so  purchased  were  at  first  all  registered  in  the 
name  of  the  Treasurer  of  the  United  States,  in  trust  for  the 
Government,  arid  were  stamped  with  the  words  "Sinking 
Fund"  on  the  face  of  each  bond.  The  interest  thereon  was 
regularly  collected  in  coin  semi-annually  and  applied  to  the 
purchase  of  other  bonds,  which  in  like  manner  were  added 
to  the  same  fund. 

By  section  6  of  the  refunding  act  of  July  14,  1870,  which 
is  as  follows,  Congress  required  the  bonds  to  be  canceled: 

SEC.  6.  And  be  it  further  enacted.  That  the  United  States 
bonds  purchased  and  now  held  in  the  Treasury  in  accordance 
with  the  provisions,  relating  to  a  sinking  fund,  of  section 
five  of  the  act  entitled  uAn  act  to  authorize  the  issue  of 
United  States  notes,  and  for  the  redemption  or  funding 
thereof,  and  for  funding  the  floating  debt  of  the  United 
States."  approved  February  twenty-filth,  eighteen  hundred 


r.onds  purchased 
aro  canceled. 


^4  SINKING  FUND.  [CiiA?,  VJ. 

and  sixty-two,  and  all  other  United  States  bonds  which  have 
been  purchased  by  the  Secretary  of  the  Treasury  with  surplus 
funds  in  the  Treasury,  and  now  held  in  the  Treasury  of  the 
United  States,  shall  be  canceled  and  destroyed,  a  detailed 
record  of  such  bonds  so  canceled  and  destroyed  to  be  first- 
made  in  the  books  of  the  Treasury  Department. 

Any  bonds  hereafter  applied  to  said  sinking  fund,  and  all 
other  United  States  bonds  redeemed  or  paid  hereafter  by  the 
United  States,  shall  also  in  like  manner  be  recorded,  can 
celed,  and  destroyed,  and  the  amount  of  the  bonds  of  each 
class  that  have  been  canceled  arid  destroyed  shall  be  de 
ducted  respectively  from  the  amount  of  each  class  of  the 
outstanding  debt  of  the  United  States. 

In  addition  to  other  amounts  that  may  be  applied  to  the 
redemption  or  payment  of  the  public  debt,  an  amount  equal 
to  the  interest  on  all  bonds  belonging  to  the  aforesaid  sink 
ing  fund  shall  be  applied,  as  the  Secretary  of  the  Treasury 
shall  from  time  to  time  direct,  to  the  payment  of  the  public- 
debt,  as  provided  for  in  section  five  of  the  act  aforesaid. 
And  the  amount  so  to  be  applied  is  hereby  appropriated 
annually  for  that  purpose  out  of  the  receipts  for  duties  on 
imported  goods. 

This  was  not  an  abandonment  of  the  sinking  fund,  but 
only  a  different  method  of  procedure  in  relation  to  it. 

Under  the  requirements  of  this  act,  all  bonds  purchased 
for  this  fund  are  canceled  and  destroyed,  but  an  accurate 
account  is  kept  thereof,  and  of  all  subsequent  purchases  for 
the  same  purpose,  and  of  the  semi-annual  interest  on  the 
whole,  as  though  the  bonds  were  in  existence. 

Fnn'i  how  rmn  Within  each  fiscal  year  coin  received  from  duties  to  the 
amount  of  one  per  cent,  of  the  entire  debt  of  every  kind, 
including  bonds,  notes,  and  all  other  obligations,  and  also 
coin  equal  to  the  amount  of  the  interest  on  all  the  bonds 
previously  purchased  for  the  same  purpose  and  canceled,  is 
applied  to  the  purchase  of  outstanding  bonds,  and  although 
the  bonds  themselves,  the  mere  evidences  of  indebtedness, 
are  destroyed,  the  amount  thereof  is  carried  to  the  account 
of  the  sinking  fund,  which  is  thus  kept  up  and  treated  as  a 
solemn  obligation  of  the  Government.  The  account  fixes 
and  determines  the  amount  of  coin  equal  to  that  which  would 
be  the  interest  on  all  the  bonds  purchased  therefor,  and 
which  must  be  by  law,  arid,  in  fact,  is  semi-annually  ap- 


CHAP.  VI. ]  TAXATION  OF  BONDS.  85 

plied  to  the  purchase  of  other  bonds  for  the  same  account, 
in  addition  to  the  amount  of  one  per  cent,  of  the  entire  debt. 

There  have  never  been  any  trustees,  managers,  or  com 
missioners  of  this  fund,  the  whole  business  being  done  in  the 
Treasury  Department,  under  the  direction  of  the  Secretary 
of  the  Treasury,  without  cost  or  expense  of  any  kind  to  the 
Government.  It  was  deemed  best  to  cancel  and  destroy  the 
bonds  themselves,  rather  than  keep  them  in  existence  in  the 
custody  of  the  Treasurer  ;  the  obligation  of  the  Government 
to  use  an  amount  of  coin  equal  to  the  interest  thereon,  in  the 
purchase  or  payment  of  other  bonds,  being  as  well  evidenced 
by  the  books  of  the  Department  as  by  printed  securities,  and 
the  danger  of  reissue  being  thereby  avoided. 

The  great  revenues  of  the  country  in  excess  of  the  expend 
itures  have  enabled  the  Secretary  to  purchase  bonds  much 
more  extensively  than  the  sinking-fund  law  absolutely  re 
quires,  and  the  debt  has  been  more  rapidly  reduced  than  by 
the  operation  of  that  fund  alone. 

But  the  sinking  fund  itself  will  extinguish  the  entire  win  extinguish 
national  debt  in  about  thirty  years,  or  soon  after  the  close  of 
the  nineteenth  century,  the  exact  time  depending  upon  the 
price  at  which  the  purchases  may  be  made  in  future.  If 
the  Government  should  at  any  time  be  obliged  to  pay  a 
large  premium,  as  it  has  done  heretofore  to  extinguish 
former  debts,  which  premium  in  some  cases  has  exceeded 
twenty  per  cent,  in  coin,  the  operation  of  the  sinking  fund 
will  be  somewhat  less  effective  than  it  has  been  in  the  past. 

The  Government  must,  under  this  law,  continue  to  be  a 
regular  purchaser  of  its  bonds,  thus  making  a  constant,  well 
known,  and  certain  market  for  the  same. 

3. 

TAXATION  OF  UNITED  STATES  BONDS  AND  OTHER  OBLIGATIONS. 

It  was  decided  by  the  Supreme  Court  in  the  year  1829,   Decisions  of  su- 
before  there  were  any  statute  provisions  on  the  subject,,  in  the  Preme  Court- 
case  of  Weston  v.  The  City  Council  of  Charleston;  (2  Peters, 
449,)  that  a  tax  by  a  State  on  United  States  stock  is  uncon 
stitutional  and  void.     Chief  Justice  Marshall,  in  giving  the 


86  TAXATION  OF  BONDS.  [CHAP.  VI. 

opinion  of  the  court,  says:  "The  tax  on  Government  stock 
is  thought  by  this  court  to  be  a  tax  on  the  contract,  a  tax 
on  the  power  to  borrow  money  on  the  credit  of  the  United 
States,  and  consequently  repugnant  to  the  Constitution,'7 
and  that  principle  is  recognized  in  the  case  of  the  Bank  of 
Commerce  v.  New  York  City,  (2  Slack,  620,)  and  in  other 
cases. 

Taxation  of  A  tax  by  a  State  on  State  banks,  upon  a  valuation  equal 

bondlh°ldinS  to  tlie  amount  of  tneir  capital  stock  paid  in  or  secured  to 
be  paid  in,  was  decided  to  be  a  tax  on  the  property  of  the 
institution,  and  where  that  property  consists  of  stocks  of  the 
Federal  Government  the  law  laying  the  tax  is  held  void. 
(Bank  of  Commerce  v.  Neio  York  City,  2  Black,  620;  Ba'di 
Tax  Case,  2  Wallace,  200,  explained  in  Provident  Institu 
tion  v.  Massachusetts,  6  Wallace,  629.) 

Taxation  of  But  national  banks  may  be  taxed  by  States  without  regard 

i.anks  whose  cap-  t     t]      f    t  t]    t        t     f  th  ir  ^pital  is  invested  in  United 

tal  is  invested  in  J 

United  states        States  bonds,  under  the  provisions  of  the  national  banking 

law  of  June  3,  1864,  section  41.     (See  notes  to  that  section.) 

savings  banks  A  State  law,  taxing  savings  banks  a  percentage  on  the 

tilSVdep^ts00    average  amount  of  their  deposits,  although  a  portion  of  the 

although  invest-    same  is  invested  in  securities  of  the  United  States,  is  a  tax 

states  securities    on  tne  franchise  of  the  bank  and  not  on  its  property,  and 

so  is  valid.      (Society  for  Savings  v.  Coite,  6  Wallace,  594; 

Provident  Institution  v.  Massachusetts,  6  Wallace,  611.) 

Laws  expressly        The  act  of  February  25,  1862,  chapter  33,  section  2,  ex- 

^d&^teTobngl  pressly  provides  that  "all  stocks,  bonds,  and  other  securi- 

t ions  from  tax-      ties  of  the  United  States  held  by  individuals,  corporations, 

ation  by  State  au-  .    ,.  .,-,  •        ,-,       TT    .,     -,    0, 

thority.  or  associations,  within  the  United  States,  shall  be  exempt 

from  taxation  by  or  under  State  authority;"  the  act  of  June 
30,  1864,  chapter  172,  section  1,  that  "all  bonds,  treasury 
notes,  and  other  obligations  of  the  United  States  shall  be 
exempt  from  taxation  by  or  under  State  or  municipal  author 
ity  ;"  and  several  other  acts  contain  similar  provisions, 
raited  states  The  Supreme  Court,  in  the  case  of  Bank  v.  Supervisors, 

notes  exempt       ^  ^/^         26,)  decided  that  United  States  notes  or  Wai- 

from  taxation.         V  j-^gw* 

tender  notes  are  obligations  within  the  meaning  of  the  acts 
exempting  United  States  obligations  from  State  arid  muni 
cipal  taxation. 


CHAP.  VI.]  TAXATION  OF  BONDS.  87 

As  to  all  bonds  and  securities  of  the  United  States.,  except  united  states 
those  of  the  Funded  Loan,  the  exemption  is  only  from  taxa-   tax^bond^0 
tion  by  Si  ate  or  municipal  authority,  and  not  by  the  Federal 
Government';  and  the  latter  for  many  years  did  lay  an  in 
come  tax  upon  the  interest  received  by  its  citizens  on  such 
securities,  and  has  the  right  to  do  so  again. 

J5ut  the  bonds  of  the  Funded  Loan  are  by  the  express   Except  thos^r 

,.     ,  n    T    i       -i  j      ir>»-r/-v  i     i        ji        i  r>    the  Funded  T.A;in 

terms  of  the  act  ot  July  14,  1870,  and  by  the  language  ot 
the  bonds  themselves,  "exempt  from  the  payment  of  all 
taxes  or  duties  of  the  United  States,  as  well  as  from  taxa 
tion  in  any  form,  by  or  under  State,  municipal,  or  local 
authority."  This  exemption  is  as  extensive  as  the  legisla 
tive  power  can  make  it,  and  entering  into  the  original 
contract,  by  being  incorporated  into  the  act  under  which 
the  bonds  are  issued  and  into  the  language  of  the  bonds 
also,  secures  to  the  holders  of  the  bonds  of  this  loan,  unlike 
those  of  any  other  loan  ever  issued  by  the  Government,  the 
full  amount  of  interest  thereon,  without  deduction  by  taxa 
tion  in  any  form  whatever,  either  by  the  States  or  the 
national  Government  itself. 


ESTABLISHED  POL^Y. 


[CHAP.  VIL 


CHAPTER  VII. 


ESTABLISHED  POLICY  OF  THE  COUNTRY,  COEVAL  WITH  THE  CON 
STITUTION,  TO  MAINTAIN  THE  PUBLIC  CREDIT,  TO  GRADUALLY 
PAY  THE  PRINCIPAL  OF  ALL  LOANS,  AND  TO  AVOID  A  PERMA 
NENT  NATIONAL  DEBT. 


I.   Extinguishment  of  the  public  debt. 
2-9.   Extracts     from     messages     of    the 

Presidents, 
lo.  The  country  free  from  public  debt. 


11.  Premiums  paid  to  redeem  debts  before 

maturity. 

12.  Reduction  of  the  existing  debt. 

13.  List  of  loans  heretofore  contracted. 


1. 


EXTINGUISHMENT  OF  THE  PUBLIC  DEBT. 

The  following  extracts  from  the  messages  of  Presidents 
of  the  United  States,  who  for  the  time  being  generally  rep 
resent  the  prevailing  sentiment  of  the  people  who  elect 
them,  indicate  the  policy  of  the  country  adopted  in  the 
early  days  of  the  national  Government,  and  ever  since 
steadily  pursued,  for  a  period  of  nearly  a  century,  to  main 
tain  faithfully  the  public  credit,  not  only  by  prompt  pay 
ment  of  the  interest,  but  by  the  gradual  extinguishment  of 
the  principal  also  of  all  national  loans,  whether  contracted 
under  ordinary  or  extraordinary  circumstances,  or  for  usual 
and  permanent  or  temporary  and  special  purposes. 


Washington,  17WX 


2. 

WASHINGTON'S  SECOND  ANNUAL  MESSAGE  TO  CONGRESS,  DECEM 
BER  8,  1790. 

"  Allow  me,  moreover,  to  hope  that  it  will  be  a  favorite 
policy  with  you  not  merely  to  secure  a  payment  of  the  in 
terest  of  the  debt  funded,  but  as  far  and  as  fast  as  the  grow 
ing  resources  of  the  country  will  permit  ,to  exonerate  it  of 
the  principal  itself.  The  appropriations  you  have  made  of 


CHAP.  VII.]        EXTRACTS  FROM  MESSAGES.  89 

the  western  lands  explain  your  disposition  on  this  subject, 
and  I  am  persuaded  that  the  sooner  that  valuable  fund 
can  be  made  to  contribute,  along  with  other  means,  to  the 
actual  reduction  of  the  public  debt,  the  more  salutary  will 
the  measure  be  to  every  public  interest  as  well  as  the  more 
satisfactory  to  our  constituents." 

3. 

WASHINGTON'S  FOURTH  ANNUAL  MESSAGE,  NOVEMBER  6,  1792. 

"I  entertain  a  strong  hope  that  the  state  of  the  national  Washington,  1792. 
finances  is  now  sufficiently  matured  to  enable  you  to  enter 
upon  a  systematic  and  effectual  arrangement  for  the  regular 
redemption  and  discharge  of  the  public  debt,  according  to 
the  right  which  has  been  reserved  to  the  Government.  No 
measure  can  be  more  desirable,  whether  viewed  with  an  eye 
to  its  intrinsic  importance,  or  to  the  general  sentiment  and 
wish  of  the  nation." 

4. 

WASHINGTON'S  SIXTH  ANNUAL  MESSAGE,  1794. 

"The  time  which  has  elapsed  since  the  commencement  of  Washington,  1794 
our  fiscal  measures,  has  developed  our  pecuniary  resources  so 
as  to  open  the  way  for  a  definitive  plan  for  the  redemption 
of  the  public  debt.  It  is  believed  that  the  result  is  such  as 
to  encourage  Congress  to  consummate  this  work  without  de 
lay.  Nothing  can  more  promote  the  permanent  welfare  of 
the  nation,  and  nothing  would  be  more  grateful  to  our  con 
stituents.  Indeed,  whatever  is  unfinished  of  our  system  of 
public  credit,  cannot  be  benefited  by  procrastination ;  and, 
as  far  as  may  be  practicable,  we  ought  to  place  that  credit 
on  grounds  which  cannot  be  disturbed,  and  to  prevent  that 
progressive  accumulation  of  debt  which  must  ultimately 
endanger  all  governments." 


5. 

WASHINGTON'S  SEVENTH  ANNUAL  MESSAGE,  1795. 

"Whether  measures  may  not  be  advisable  to  reinforce  the  Washington,  nos. 
provision  for  the  redemption  of  the  public  debt,  will  natu 
rally  engage  your  examination.  Congress  have  demonstrated 
their  sense  to  be,  and  it  were  superfluous  to  repeat  mine, 
that  whatsoever  will  tend  to  accelerate  the  honorable  extinc- 


90  EXTRACTS  FROM  MESSAGES.       [CHAP.  VII 

tion  of  our  public  debt  accords  as  much  with  the  true  inter 
ests  of  our  country  as  with  the  general  sense  of  our  constit 
uents." 

6. 
WASHINGTON'S  EIGHTH  ANNUAL  MESSAGE,  1796. 

Washington, HOG.  "A  reinforcement  of  the  existing  provisions  for  discharg 
ing  our  public  debt  was  mentioned  in  my  address  at  the 
opening  of  the  last  session.  Some  preliminary  steps  were 
taken  toward  it,  the  maturing  of  which  will,  no  doubt, 
engage  your  zealous  attention  during  the  present  session. 
I  will  only  add,  that  it  will  aiford  me  a  heartfelt  satisfac 
tion  to  concur  in  such  further  measures  as  will  ascertain  to 
our  country  the  prospect  of  a  speedy  extinguishment  of  the 
debt.  Posterity  may  have  cause  to  regret  if  from  any 
motive  intervals  of  tranquillity  are  left  unimproved  for 
accelerating  this  valuable  end." 

7. 
WASHINGTON'S  FAREWELL  ADDRESS. 

Washington,  1706.  uAs  a  very  important  source  of  strength  and  security, 
cherish  public  credit.  One  method  of  preserving  it  is  to 
use  it  as  sparingly  as  possible,  avoiding  occasions  of  expense 
by  cultivating  peace,  but  remembering,  also,  that  timely 
disbursements  to  prepare  for  danger  frequently  prevent 
much  greater  disbursements  to  repel  it;  avoiding  likewise 
the  accumulation  of  debt,  not  only  by  shunning  occasions 
of  expense,  but  by  vigorous  exertions  in  time  of  peace  to 
discharge  the  debts  which  unavoidable  wars  have  occasioned, 
not  ungenerously  throwing  upon  posterity  the  burden  which 
we  ourselves  ought  to  bear." 

8. 

PRESIDENT  JOHN  ADAMS'S  FIRST  ANNUAL  MESSAGE,  1797. 

president  John  "Since  the  decay  of  the  feudal  system,  by  which  the  pub- 
Adams,  1797.  YIG  defense  was  provided  for  chiefly  at  the  expense  of  indi 
viduals,  the  system  of  loans  has  been  introduced;  and  as 
no  nation  can  raise  within  the  year  by  taxes  sufficient  sums 
for  defense  and  for  military  operations  in  time  of  war,  the 
sums  loaned  and  debts  contracted  have  necessarily  become 
the  subjects  of  what  have  been  called  fumVng  systems. 


CHAP.  VII.]  FREE  FROM  DEBT.  91 

The  consequences  arising  from  the  continued  accumulation 
of  public  debts  in  other  countries,  ought  to  admonish  us  to 
be  careful  to  prevent  their  growth  in  our  own  case.  The 
national  defense  must  be  provided  for  as  well  as  the  sup 
port  of  Government,  but  both  should  be  accomplished  as 
much  as  possible  by  immediate  taxes,  and  as  little  as  possi 
ble  by  loans." 

9. 

PRESIDENT  JOHN  QUINCY  ADAMS'S  THIRD  ANNUAL  MESSAGE, 

1827. 

"The  deep  solicitude  felt  by  our  citizens  of  all  classes  President j. Q. 
throughout  the  Union  for  the  total  discharge  of  the  public  Adams> 1827- 
debt,  will  apologize  for  the  earnestness  with  which  I  deem 
it  my  duty  to  urge  this  topic  upon  the  consideration  of  Con 
gress — of  recommending  to  them  again  the  observance  of 
the  strictest  economy  in  the  public  funds." 

10. 
THE  COUNTRY  FREE  FROM  PUBLIC  DEBT. 

''President  Jackson,  in  his  seventh  annual  message  to   President  jack- 
Congress,  December,  1835,  made  the  following  announce-  son' 1835- 
ment :  '  Since  my  last  annual  communication  all  the  remains   The  country  tree 
of  the  public  debt  have  been  redeemed,  or  money  has  been  from  deht- 
placed  in  deposit  for  this  purpose,  whenever  the  creditors 
choose  to  receive  it.     All  the  other  pecuniary  engagements 
of  the  Government  have  been  honorably  and  promptly  ful 
filled,  and  there  will  be  a  balance  in  the  Treasury  at  the 
close  of  the  present  year  of  about  nineteen    millions  of 
dollars." 

In  1834  and  1835  the  country  was  entirely  out  of  debt,  ceiebratica  of 
and  in  honor  of  the  event  a  celebration  was  had  in  Wash-  theevent- 
ington  on  the  8th  of  January,  1835,  the  anniversary  of  the 
battle  of  New  Orleans,  at  which  were  present  about  two 
hundred  and  fifty  of  the  representative  men  of  the  country. 
Andrew  Jackson,  then  President,  was  not  himself  present, 
but  he  sent  the  following  sentiment : 

"  The  payment  of  the  Public  Debt :  Let  us  commemorate  it 
as  an  event  which  gives  us  increased  power  as  a  nation  and 
reflects  lustre  on  our  Federal  Union,  of  whose  justice,  fidel 
ity,  and  wisdom,  it  is  a  glorious  illustration." 


90  EXTRACTS  FROM  MESSAGES.        [CHAP.  VII 

tion  of  our  public  debt  accords  as  much  with  the  true  inter 
ests  of  our  country  as  with  the  general  sense  of  our  constit 
uents." 


WASHINGTON'S  EIGHTH  ANNUAL  MESSAGE,  1796. 

Washington, HOG.  "A  reinforcement  of  the  existing  provisions  for  discharg 
ing  our  public  debt  was  mentioned  in  my  address  at  the 
opening  of  the  last  session.  Some  preliminary  steps  were 
taken  toward  it,  the  maturing  of  which  will,  no  doubt, 
engage  your  zealous  attention  during  the  present  session. 
I  will  only  add,  that  it  will  afford  me  a  heartfelt  satisfac 
tion  to  concur  in  such  further  measures  as  will  ascertain  to 
our  country  the  prospect  of  a  speedy  extinguishment  of  the 
debt.  Posterity  may  have  cause  to  regret  if  from  any 
motive  intervals  of  tranquillity  are  left  unimproved  for 
accelerating  this  valuable  end." 

7. 
WASHINGTON'S  FAREWELL  ADDRESS. 

Washington, HOG.  aAs  a  very  important  source  of  strength  and  security, 
cherish  public  credit.  One  method  of  preserving  it  is  to 
use  it  as  sparingly  as  possible,  avoiding  occasions  of  expense 
by  cultivating  peace,  but  remembering,  also,  that  timely 
disbursements  to  prepare  for  danger  frequently  prevent 
much  greater  disbursements  to  repel  it;  avoiding  likewise 
the  accumulation  of  debt,  not  only  by  shunning  occasions 
of  expense,  but  by  vigorous  exertions  in  time  of  peace  to 
discharge  the  debts  which  unavoidable  wars  have  occasioned, 
not  ungenerously  throwing  upon  posterity  the  burden  which 
we  ourselves  ought  to  bear." 

8. 

PRESIDENT  JOHN  ADAMS'S  FIRST  ANNUAL  MESSAGE,  1797. 

president  John  "Since  the  decay  of  the  feudal  system,  by  which  the  pub- 
s,  1797.  \{c  defense  was  provided  for  chiefly  at  the  expense  of  indi 
viduals,  the  system  of  loans  has  been  introduced;  and  as 
no  nation  can  raise  within  the  year  by  taxes  sufficient  sums 
for  defense  and  for  military  operations  in  time  of  war,  the 
sums  loaned  and  debts  contracted  have  necessarily  become 
the  subjects  of  what  have  been  called  funcVng  systems. 


CHAP.  VII.]  FREE  FROM  DEBT.  91 

The  consequences  arising  from  the  continued  accumulation 
of  public  debts  in  other  countries,  ought  to  admonish  us  to 
be  careful  to  prevent  their  growth  in  our  own  case.  The 
national  defense  must  be  provided  for  as  well  as  the  sup 
port  of  Government,  but  both  should  be  accomplished  as 
much  as  possible  by  immediate  taxes,  and  as  little  as  possi 
ble  by  loans." 

9. 

PRESIDENT  JOHN  QUINCY  ADAMS'S  THIRD  ANNUAL  MESSAGE, 

1827. 

"The  deep  solicitude  felt  by  our  citizens  of  all  classes  President j. Q. 
throughout  the  Union  for  the  total  discharge  of  the  public  Adams,  1327. 
debt,  will  apologize  for  the  earnestness  with  which  I  deem 
it  my  duty  to  urge  this  topic  upon  the  consideration  of  Con 
gress — of  recommending  to  them  again  the  observance  of 
the  strictest  economy  in  the  public  funds." 

10. 
THE  COUNTRY  FREE  FROM  PUBLIC  DEBT. 

"President  Jackson,  in  his  seventh  annual  message  to   President  Jack- 
Congress,  December,  1835,  made  the  following  announce-  son,  isss. 
ment :  '  Since  my  last  annual  communication  all  the  remains   The  country  tree 
of  the  public  debt  have  been  redeemed,  or  money  has  been  from  debt- 
placed  in  deposit  for  this  purpose,  whenever  the  creditors 
choose  to  receive  it.     All  the  other  pecuniary  engagements 
of  the  Government  have  been  honorably  and  promptly  ful 
filled,  and  there  will  be  a  balance  in  the  Treasury  at  the 
close  of  the  present  year  of  about  nineteen    millions  of 
dollars." 

In  1834  and  1835  the  country  was  entirely  out  of  debt,  ceiebratica  of 
and  in  honor  of  the  event  a  celebration  was  had  in  Wash-  theevenfc 
ingtori  on  the  8th  of  January,  1835,  the  anniversary  of  the 
battle  of  New  Orleans,  at  which  were  present  about  two 
hundred  and  fifty  of  the  representative  men  of  the  country. 
Andrew  Jackson,  then  President,  was  not  himself  present, 
but  he  sent  the  following  sentiment : 

' '  The  payment  of  the  Public  Debt :  Let  us  commemorate  it 
as  an  event  which  gives  us  increased  power  as  a  nation  and 
reflects  lustre  on  our  Federal  Union,  of  whose  justice,  fidel 
ity,  and  wisdom,  it  is  a  glorious  illustration." 


92 


REDUCTION  OF  EXISTING  DEBT.    [CHAP.  VIL 


SB  rpius  revenue 


James  K.  Polk,  afterwards  President  of  the  United  States, 
then  first  vice  president  of  the  occasion,  in  his  remarks, 
said:  "The  day  of  the  final  payment  of  the  national  debt 
must  be  a  day  of  national  rejoicing.  The  only  national 
debt  that  now  remains  is  that  debt  of  gratitude  we  owe  to 
those  who  established  and  those  who  sustained  our  national 
freedom.  We  hail  the  extinguishment,  at  so  early  a  pe 
riod,  of  the  public  debt  created  by  two  wars,  the  one  to 
purchase,  the  other  to  preserve  and  protect  public  liberty, 
as  the  result  of  a  wise,  economical,  and  patriotic  adminis 
tration  of  public  affairs." 

On  the  first  day  of  January,  1837,  there  was  in  the 
Treasury  a  balance  of  137,327,252  69;  and  of  that  amount, 
by  an  act  of  Congress  passed  June,  1836,  the  sum  of 
$28,101,644  91  was  apportioned  to  and  actually  distributed 


among  the  several  States. 


11. 


Premiums  paid 
for  bonds. 


PREMIUMS  PAID  TO  REDEEM  DEBTS  BEFORE  MATURITY. 


On  several  occasions  the  Government  ha.s  purchased  its 
outstanding  debts  before  maturity  at  large  premiums  in 
in  coin.  In  1842  at  an  average  premium  of  lo^j-  per  cent.  ; 

in  1846  at  T-,Vir  Per  cent-5  in  184^  at  20iVo  Per  cent-J  and 
in  1848  at  20,-^  average.  In  some  cases  bonds  were  pur 
chased  at  a  premium  as  high  as  23  per  cent,  in  coin. 


12. 


Reduction  of  ex- 
igtitg  debt. 


REDUCTION  OF  THE  EXISTING  DEBT. 

The  public  debt,  as  represented  on  the  books  of  the  Treas 
ury  Department,  exclusive  of  Pacific  Railway  bonds  and 
of  accrued  interest,  (which  until  1869  was  not  included  in 
the  debt  statement.)  and  deducting  therefrom  the  cash  in 
the  Treasury,  reached  its  highest  point  March  1,  1866, 
when  it  stood  at  §2,707,856,000  22. 

Immediately  after  the  close  of  the  Rebellion  it  was  re 
duced  by  the  proceeds  of  the  sale  of  materials  of  war ;  and 
since  then  it  has  been  further  reduced  by  the  surplus  revenue 


CHAP.  VII. 1 


LIST  OF  LOANS. 


93 


of  the  Government  until,  on  the  first  of  September,  1872,  it 
stood,  including  accrued  interest  and  interest  due  and  un 
paid,  less  cash  in  the  Treasury,  at  $2,177,322,020  55  ;  show 
ing  a  reduction  in  five  and  a  half  years  of  $564,599,335  35. 
By  the  operation  of  the  Sinking  Fund,  the  deht  must 
continue  to  be  reduced  annually  till  it  is  finally  extin 
guished.  Seepage^, 

President  Grant,  in  his  inaugural  address,  March  4,  1869, 
said,  in  relation  to  the  debt: 

"A  great  debt  has  been  contracted  in  securing  to  us  and  to 
our  posterity  the  Union.  The  payment  of  this,  principal 
and  interest,  as  well  as  the  return  to  a  specie  basis  as  soon 
as  it  can  be  accomplished  without  material  detriment  to 
the  debtor  class  or  to  the  country  at  large,  must  be  pro 
vided  for.  To  protect  the  national  honor,  every  dollar 
of  Government  indebtedness  should  be  paid  in  gold,  unless 
otherwise  stipulated  in  the  contract." 


13. 

LIST  OF  ALL  LOANS  HERETOFORE  CONTRACTED. 

There  can  be  no  better  evidence  of  the  policy  of  the  Li.stofaiiif.ans 
country  than  the  following  complete  list  of  all  debts  which 
have  been  -contracted  by  the  Government  from  1776  to  the 
present  time,  all  of  which  have  been  fully  paid  and  canceled 
or  called  in  for  payment,  except  so  much  as  remains  of 
those  incurred  since  1858,  contracted  mostly  on  account  of 
the  Rebellion,  and  which  have  been  rapidly  reduced  since 
the  establishment  of  peace,  as  fully  set  forth  in  the  fore 
going  pages : 


Title  of  Loan. 

Act  of  authorization. 

Amount  issued. 

Farmers  General  of  Franco 

December  23  1776 

$181  500  GO 

Loan  of  18  million  livres,  France..  J 
"      1781  from  Spain  

December  23,  1776,  ) 
December    3,  1777,  f 
September  28,  1779  .. 

3,267,000  00 
174017  13 

"      lOmillion  livres  from  France 
"      6        "          "  "  

October  26,  1779  

1,815,000  00 
1,089000  00 

Balance  of  supplies  due  France 

ii             it 

24  332  86 

Loan  of  1782.  Holland... 

« 

2.000.000  00 

94 


LIST  OF  LOANS. 


[CHAP.  VII. 


Title  of  Loan. 

Act  of  authorization. 

Amount  issued. 

Loan  of  1784  Holland 

October  27  1779 

800  000  00 

'      1787 

400000  00 

1      1788        "                     .    ..    . 

(>            .< 

400000  00 

1      1790       ."    .      . 

August4andl2  1790 

1,200000  00 

'      March    1791    Holland..,  . 

1  000  000  00 

'      September  1791..."  

.1                        II                                 II 

2,400,000  00 

'      November,  1791,  Antwerp  . 

U                        II                                 II 

820000  00 

1      December,  1791,  Holland... 

II                        II                                 U 

1,200.000  00 

'      1792 

II           II               11 

1  180000  00 

1      1793 

II          II 

400  000  00 

'      1794 

U                        U                                 II 

1  200  000  00 

Debts  due  foreign  officers 

May  8   1792 

186988  78 

Debts  due  from  old  government 

502465  32 

Temporary  loans  of  1789  and  1790 

246,608  81 

Six  per  cent  stock  of  1790 

August  4  and  12  1790 

29507522  78 

Deferred  six  per  cent,  stock 

14622600  98 

Three  per  cent  stock  .           

U                        II                                 II 

19  094  231  62 

Subscription  loan  of  1791,  B.  U.  S.... 
Temporary  loan,  B'k  of  N.  America.. 

February  25,  1791.... 
March  3   1791 

2,000,000  00 
156  595  56 

"      1792,  B.  U.  S  
"       1793  "  
"      1794,  B'kofN.Y.. 
March,  1794,  B.U.S 

May  2,  1792  
February  28,  1793.  .. 
March  20,  1794  

400,000  00 
800,000  00 
200,000  00 
1  000  000  00 

"       June  ".  "  

June  9,  1794  

1,000000  00 

Dec  "  ".... 

December  18   1794  .. 

2,000,000  00 

Feb.,     1795....".... 

February  21,  1795... 

800000  00 

1       March  A  "  ".... 
"      B  " 

March  3,  1795  

500,000  00 
500  000  00 

C  " 

U                      U 

500  000  00 

Five  and  J  per  cent,  stock  of  1795 

II          II 

1  848  900  00 

Four  and  ^  per  cent  stock  of      " 

•  1          II 

176000  00 

Temporary  loan,  Bank  of  New  York.. 
1798   B  U.  S. 

May  31,  1796  

March  3   1795 

320,000  00 
?00  000  00 

Six  per  cent,  stock  of  1796  .    .  . 

May  31    1796 

80  000  00 

Navy  six  per  cent,  stock  

June  30  1798 

711  700  00 

Eight  per  cent,  stock  of  1798  

July  16   1798 

5  000  000  00 

Eight  per  cent,  stock  of  1800    

May  7   1800 

1  481  700  00 

Louisiana  six  per  cent,  stock.  .    . 

November  10   1803 

1  1  250  000  00 

Exchanged  six  percent.  stock  of  1807.. 
Converted..."  "  "  ". 

February  11,  1807  

6,294,051   12 
1  859  850  70 

Temporary  loan  of  1810 

May  1   1810 

2  750  000  00 

Six  per  cent,  stock  of  1812  

March  14,  1812  

8,134,700  00 

Temporary  loan  of  1812  

2  150000  00 

Treasury  notes  of  1812 

June  30  1812 

5  000  000  00 

Exchanged  six  per  cent,  stock  of  1812.. 
Six  per  cent,  loan  of  February,  1813.. 
Treasury  notes  of  1813 

July  6,  1812  
February  8,  1813  
February  25  1813 

2,984,746  72 
18,109,377  43 
5  000  000  00 

Six  per  cent,  loan  of  August,  1813... 

August  2,  1813  

8498581  9-r> 

Treasury  notes  of  March   1814 

March  4  1814 

10000000  00 

Ten  million  loan  of  1814  

March  24,  1814  

9919476  25 

Six  "  "  "  

5  384  134  87 

Undesignated  six  per  cent,  stock  of 
1814  

U                              II 

746  403  31 

Mississippi  stock  

March  31   1814 

4  '"'S0  151  12 

Temporary  loan  of  1814 

November  15  1814 

1  450  000  00 

Treasury  notes,  December,  1814  
Direct  tax  loan.... 

December  26,  1814.... 
January  9.  1815.... 

8,318,400  00 
200.000  00 

CHAP.  VII.  ] 


LIST  OF  LOANS. 


Title  of  Loan. 

Date  of  authorization. 

Amount  issued. 

Temporary  loan,  February,  1815  
Seven  per  cent,  stock  of  1815  
Treasury  notes  of  1815          

February  13,  1815.... 
February  24,  1815.... 
February  24,  1815.... 

$225,000  00 
9,070,386  00 
4,969,400  00 
3  392  994  00 

Small  treasury  notes         

Treasury  note  six  per  cent,  stock  
Temporary  loan  March,  1815  
Six  per  cent,  stock  of  1815  

u 

1,505,352  18 
1,150,000  00 
12,288,147  56 
7,000,000  00 
999,999  13 
2,000.000  00 
4,735,296  30 
56,704  77 
5,000,000  00 
4,454,727  95 
5,000,000  00 

1,539,336  16 
10,000,000  00 
5,709,810  01 
3,857,276  21 
7,114,251  31 
7,529.062  75 
5,672,976  88 
7,959,994  83 

8,000,000  00 

3,025,554  89 
1,806,950  00 
7,004,231  35 
26,122,100  00 
7,687,800  00 
4,999,149  45 
303,573  92 
28,207,000  00 
233,075  00 
16,000.000  00 
5,000,000  00 
20,000.000  00 
20,000,000  00 
7,022,000  00 
10,010,900  00 
18,415,000  00 

35  409  350  00 

March  3  1815  

Subscription  loan  to  Bank  U.  S  
Five  per  cent  stock  of  1820 

April  10,  1816  

May  15  1820 

Six 

Five  "  "..,  1821  
Exchanged  five  per  cent,  of  1822  
Four  and  \  per  cent,  stock  May  24,  '24.. 
Exchanged  four  and  \  per  cent,  stock.. 
Four  and  \  per  cent,  stock  May  26,  '24. 
Exchanged  four  and  \  per  ct.  stock 
1825   ".  

March  3,  1821... 
April  20,  1822  
May  24,  1824  
May  26   1824  .... 

March  3,  1825  

Treasury  notes  of  1837  

October  12,  1837  
May  21  1838 

1838 

1839 

March  2  1839 

1840  

"  31,1840  

1841  

February  15,  1841  
July  21,  1841  

Loan  of  1841  

Treasury  notes  of  January,  1842  
Loan  of  1842  j 

January  31,  1842  
July  21,  1841,  April  { 
15,  1842  j 
August  31,1842  
March  3   1843  

Treasury  notes  of  August,  1842  
"         1843  
Loan  of  1843  

Treasury  notes  of  January,  1846  
July   1846 

January  28,  1846  
July  22  1846 

Loan  of  1846. 

Mexican  indemnity  stock  
Loan  of  1847 

August  10,1846  
January  28,  1847  
February  11,  1847  
March  31,  1848  
September  9,  1850  
December  23,  1857.... 
June  14,  1858  
June  22,  1860  

Bounty  land  scrip 

Loan  of  1848 

Texan  indemnity  stock 

Treasury  notes  of  1857      ..    . 

Loan  of  1858.            

Loan  of  1860            

Treasury  notes  of  1860     .  . 

December  17,  I860.... 
February  8,  1861  

Loan  of  'February  1861   (81's)      

Treasury  notes  of  1861  

June  22  1860 

i. 

March  2,  1861  

Sixty  days  Treasury  notes  
Oregon  war  debt 

u 

1,090,850  00 
60,000.000  00 

189,318,100  00 
140,094,750  00 
46,303,129  17 
514,771,600  00 

432,757,601  00 
131,497,853  62 

Old  demand  notes  | 

July  17,  Aug.  5,  'HI.  \ 
and  Feb.  12,  1862  j 

Loan  of  July  and  August,  1861,  (81's). 
Seven-thirties  of  1861 

Subscription  loan   Nov   16   1861 

K 

Five-twenties  of  1^'^ 

February  25,  1862.... 
Feb.  25.  July  11,  '62  j 
March  3/1863....  j 
Feb.  25,  Mar.  17/62  j 
June  30,1864  j 

United  Spates  notes           | 

Temporary  loan        -j 

LIST  OF  LOANS. 


[ClIAP.    VI 1. 


Title  of  Loan. 

Date  of  authorisation. 

Amount  ji-fUit.1. 

Certificates  of  indebtedness  | 

Mar.  land  17,  1862,  1 

236373000  00 

Fractional  currency  •] 

and  March  3,  '63.  j 
July  17,  ;62,  Mar.  3,  ) 

43  179  650  03 

Loan  of  1863  (Si's) 

'63,  June  30,  '64.  j 
March  3    1863 

75  000  000  00 

One-year  notes  of  1863 

44  5°0  000  00 

Two         "                 " 

«                 u 

166  480  000  00 

Compound  interest  notes 

Mar  3  '63  June  30  '64 

217024  160  00 

Coin  certificates 

"  (9  5) 

50  392  180  00 

Ten-  forties  of  1864  
Five-twenties  of  March   1864 

"  1864  

196,117,300  00 
3  882  500  00 

June      1864  

June  30  1864 

125  561  300  OC 

Seven-thirties  of  1864-1865              j 

June  30,  1864,  Mar.  ) 

830000000  OC 

Five-twenties  '65  consols  '65  '7  '8. 

3,  1865  J 

958467900  OC 

Three  per  cent.  certifieaies  

March  2  1867  

65  230  000  OC 

Certificates  of  indebtedness,  1870  
Funded  loan  of  1881  

July    8,1870  
July  14,  1870  

678,362  41 
200,000,000  OC 

In  the  foregoing  list  the  amount  set  down  to  each  of  those 
items  of  indebtedness  in  which  the  certificates,  notes,  or  cur 
rency  were  issued  and  reissued,  is  the  largest  amount  out 
standing  at  any  one  time. 


PART    II. 

THE  NATIONAL  BANKING  LAWS  OF  THE  UNITED  STATES, 

WITH  NOTES  AND  REFERENCES  TO  THE  DECISIONS 

OF  THE  COURTS  AND  OPINIONS  OF  THE 

ATTORNEYS  GENERAL  THEREON. 


INTRODUCTORY  OBSERVATIONS. 


The  necessities  of  the  Government,  created  by  the  great; 
Rebellion,  brought  into  operation  many  powers  conferred 
upon  Congress  by  the  Constitution,,  which  until  that  time 
had  rarely  or  never  been  exercised,  and  new  and  extraordi 
nary  legislation  relating  to  the  finances  and  financial  con 
dition  of  the*  country  was  enacted  in  order  to  supply  the 
wants  of  the  national  Government. 

Previously  to  the  year  1863  Congress  had  never  inter 
fered  with  the  banks  of  issue  created  by  the  several  States, 
except  in  1813  to  levy,  temporarily  a  small  stamp  tax  on 
the  notes  of  banks  and  bankers  for  the  purpose  of  revenue, 
and  in  1862  to  prohibit  all  corporations  and  individual? 
from  issuing  notes  of  a  fractional  part  of  a  dollar. 

In  1836  an  act  was  passed  providing  that  State  banks 
conveniently  located  might  be  selected  as  depositories  of 
public  money,  upon  certain  conditions  therein  prescribed: 
one  of  which  was,  that  no  bank  so  selected  should  issue 
bills  of  less  denomination  than  five  dollars.  The  "  inde 
pendent  treasury  system,"  established  by  the  acts  of  July 
4,  1840,  and  August  6,  1846,  superseded  the  employment 
of  State  banks  as  depositories. 

At  the  time  of  the  adoption  of  the  Constitution  of  the 
United  States  four  State  banks  were  in  existence,  one  in 
each  of  the  States  of  Maryland,  Massachusetts,  New  York, 
and  Pennsylvania,  and  the  number  went  on  increasing, 
until,  in  the  year  1863,  there  were  more  than  one  thousand 
five  hundred  in  the  different  States,  each  subject  to  the  laws 
of  the  State  by  which  it  was  incorporated,  but  substantially 
independent  of  any  legislation  of  Congress. 

Congress  twice  chartered  a  bank  of  the  United  States, 
first  in  1791  and  again  in  1816,  but  when  the  charter  ex 
pired  in  1836  it  was  not  renewed,  and  Congress  never  after- 


100  INTRODUCTORY  OBSERVATIONS. 

wards  enacted  a  law  for  the  incorporation  of  banks,  except 
some  local  banks  in  the  District  of  Columbia,,  over  which  it 
has  exclusive  jurisdiction,  until  the  passage  of  the  act  of 
February  25,  1863,  entitled  c'An  act  to  provide  a  national 
currency  secured  by  a  pledge  of  United  States  stocks,  and 
to  provide  for  the  circulation  and  redemption  thereof." 

In  order  to  introduce  some  changes  in  the  law  this  act 
was  the  next  year  repealed,  and  a  substitute  enacted  June 
3,  1864,  entitled  uAn  act  to  provide  a  national  currency 
secured  by  a  pledge  of  United  States  bonds,  and  to  provide 
for  the  circulation  and  redemption  thereof;"  which,  with 
the  amendments  thereto,  is  printed  in  the  following  pages. 

Under  the  operation  of  these  laws  and  the  9th  section 
of  the  act  of  July  13,  1866,  and  the  2d  section  of  the  act 
of  March  26,  1867,  taxing  the  notes  of  State  banks  and  of 
towns,  cities,  municipal  corporations,  and  individuals,  used 
ici  circulation,  nearly  all  the  State  banks  have  been  con 
verted  into  national  banks  or  gone  out  of  existence,  and 
those  few  which  remain  have  ceased  to  issue  notes  for  circu 
lation,  finding  it  unprofitable  to  do  so. 

All  paper  money  has  disappeared  from  circulation,  except 
United  States  legal-tender  notes  and  national  bank  notes. 

The  number  of  national  banks  is  now  a  little  more  than 
one  thousand  nine  hundred,  issuing  their  notes  to  the  amount 
of  about  three  hundred  and  forty  millions  of  dollars. 


ACTS  OF  CONGRESS. 


ACT  OF  JUNE  3, 1864,  CHAPTER  106. 

A.N  ACT  TO  PROVIDE  A  NATIONAL  CURRENCY  SECURED  BY  A  PLEDGE  OF  UNITED 
STATES  BONDS,  AND  TO  PROVIDE  FOR  THE  CIRCULATION  AND  REDEMPTION 
THEREOF. 

CURRENCY  BUREAU. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  currency  Bnrpan 
of  the  United  States  of  America  in  Congress  assembled,  That 
there  shall  be  established  in  the  Treasury  Department  a 
separate  bureau,  which  shall  be  charged  with  the  execution 
of  this  and  all  other  laws  that  may  be  passed  by  Congress 
respecting  the  issue  and  regulation  of  a  national  currency 
secured  by  United  States  bonds. 

The  chief  officer  of  the  said  bureau  shall  be  denominated  comptroller  of 
the  Comptroller  of  the  Currency,  and  shall  be  under  the  Currency- 
general  direction  of  the  Secretary  of  the  Treasury.     He 
shall  be  appointed  by  the  President,  on  the  recommendation 
of  the  Secretary  of  the  Treasury,  by  and  with  the  advice  and 
consent  of  the  Senate,  and  shall  hold  his  office  for  the  term 
of  five  years  unless  sooner  removed  by  the  President,  upon 
reasons  to  be  communicated  by  him  to  the  Senate ;  he  shall 
receive  an  annual  salary  of  five  thousand  dollars ; 

He  shall  have  a  competent  de'puty,  appointed  by  the  Sec-  Deputy  comp. 
retary,  whose  salary  shall  be  two  thousand  five  hundred  troller< 
dollars,  and  who  shall  possess  the  power  and  perform  the 
duties  attached  by  law  to  the  office  of  Comptroller  during  a 
vacancy  in  such  office  and  during  his  absence  or  inability. 

He  shall  employ,  from  time  to  time,  the  necessary  clerks  cierks. 
to  discharge  such  duties  as  he  shall  direct,  which  clerks  shall 
be  appointed  and  classified  by  the  Secretary  of  the  Treasury 
in  the  manner  now  provided  by  law. 

Within  fifteen  days  from  the  time  of  notice  of  his  appoint-  oath  and  bond  oi 
ment  the  Comptroller  shall  take  and  subscribe  the  oath  of  ComPtrol!c>!' 

101 


102 


BANKING  LAWS. 


— of  Deputy 
Comptroller. 


Neither  to  be  in 
terested  in  banks. 


Seal  of  office,  its 
use,  &G. 


Rooms  for  office, 
raultp,  &c. 


office  prescribed  by  the  Constitution  and  laws  of  the  United 
States  ;  and  be  shall  give  to  the  United  States  a  bond  in  the 
penalty  of  one  hundred  thousand  dollars,  with  not  less  than 
two  responsible  sureties,  to  be  approved  by  the  Secretary  of 
the  Treasury,  conditioned  for  the  faithful  discharge  of  the 
duties  of  his  office. 

The  Deputy  Comptroller  so  appointed  shall  also  take  the 
oath  of  office  prescribed  by  the  Constitution  and  laws  of  the 
United  States,  and  shall  give  a  like  bond  in  the  penalty  of 
fifty  thousand  dollars. 

The  Comptroller  and  Deputy  Comptroller  shall  not,  either 
directly  or  indirectly,  be  interested  in  any  association  issuing 
national  currency  under  the  provisions  of  this  act. 

SEC.  2.  And  be  it  further  enacted,  That  the  Comptroller 
of  the  Currency,,  with  the  approval  of  the  Secretary  of  the 
Treasury,  shall  devise  a  seal,  with  suitable  inscriptions,  for 
his  office,  a  description  of  which,  with  a  certificate  of  ap 
proval  by  the  Secretary  of  the  Treasury,  shall  be  filed  in  the 
office  of  the  Secretary  of  State  with  an  impression  thereof, 
which  shall  thereupon  become  the  seal  of  office  of  the  Comp 
troller  of  the  Currency,  and  the  same  may  be  renewed  when 
necessary.  Every  certificate,  assignment,  and  conveyance 
executed  by  the  Comptroller,  in  pursuance  of  any  authority 
conferred  on  him  by  law,  and  sealed  with  his  seal  of  office, 
shall  be  received  in  evidence  in  all  places  and  courts  what 
soever  ;  and  all  copies  of  papers  in  the  office  of  the  Comp 
troller,  certified  by  him  and  authenticated  by  the  said  seal, 
shall  in  all  cases  be  evidence  equally  and  in  like  manner  as 
the  original.  An  impression  of  such  seal  directly  on  the 
paper  shall  be  as  valid  as  if  made  on  wax  or  waler. 

SEC.  3.  And  be  it  further  enacted,  That  there  shall  be  as 
signed  to  the  Comptroller  of  the  Currency  by  the  Secretary 
of  the  Treasury  suitable  rooms  in  the  Treasury  Building  for 
conducting  the  business  of  the  Currency  Bureau,  in  which 
shall  be  safe  and  secure  fire-proof  vaults,  in  which  it  shall 
be  the  duty  of  the  Comptroller  to  deposit  and  safely  keep 
all  the  plates  not  necessarily  in  the  possession  of  engravers 
or  printers,  and  other  valuable  things  belonging  to  his  de 
partment;  and  the  Comptroller  shall  from  time  to  time 


BANKS,  HOW  FORMED.  103 

furnish  the  necessary  furniture,  stationery,  fuel,  lights,  and 
other  proper  conveniences  for  the  transaction  of  the  said 
business. 

UNITED  STATES  BONDS  DEFINED. 

SEC.  4.  And  be  it  further  enacted,  That  the  term  "  United  Definition  of  uni 

States  bonds,"  as  used  in  this  act,  shall  be  construed  to  as  used^n  this*' 

mean  all  registered  bonds  now  issued,  or  that  may  here-  act- 
after  be  issued,  on  the  faith  of  the  United  States  by  the 

Secretary  of  the  Treasury,  in  pursuance  of  law. 

* 

BANKS,  HOW  FORMED. 

SEC.  5.  And  be  it  further  enacted,  That  associations  for  Banking  associa- 
carrying  on  the  business  of  banking  may  be  formed1  by  any  ^°ns» how  fonr-- 
number  of  persons,  not  less  in  any  case  than  five,  who  shall 
enier  into  articles  of  Association,  which  shall  specify  in  gen 
eral  terms  the  object  for  which  the  association  is  formed, 
and  may  contain  any  other  provisions,  not  inconsistent  with 
the  provisions  of  this  act,  which  the  association  may  see  fit 
to  adopt  for  the  regulation  of  the  business  of  the  association 
and  the  conduct  of  its  affairs,  which  said  articles  shall  be 
signed  by  the  persons  uniting  to  form  the  association,  and  a 
copy  of  them  forwarded  to  the  Comptroller  of  the  Currency, 
to  be  filed  and  preserved  in  his  office. 

SEC.  6.  And  be  it  further  enacted,  That  the  persons  uniting  organization  cer 
to  form  such  an  association  shall,  under  their  hands,  make  tlflcates- 
an  organization  certificate,  which  shall  specify — 

First.  The  name  assumed  by  such  association,  which 
name  shall  be  subject  to  the  approval  of  the  Comptroller.  , 

Second.  The  place  where  its  operations  of  discount  and 

1.  There  is  no  limit  to  the  aggregate  amount  of  capital  of  banks  which 
may  be  organized  under  this  act.  (Opinions  of  Attorneys  General,  vol.  11, 
page  33-1.) 

Any  number  of  banks  may  be  organized,  with  any  amount  of  capital,  not 
less  to  each  bank  than  the  minimum  specified  in  section  7.  But  each  bank 
must  deposit  bonds  with  the  Treasurer  of  the  United  States,  as  required  by 
section  16,  whether  it  obtains  circulation  or  not.  And  the  aggregate  circu 
lation  of  currency  notes  is  limited  to  $354,000,000.  (See  section  22,  and 
note  9.) 

There  is  no  limit  to  the  aggregate  circulation  of  gold  notes.  (See  Act  of 
July  12,  1870,  chapter  252,  sections  3,  4,  5. 


104 


BANKING  LAWS. 


—  to  be  acknowl 
edged. 


Copies  of,  when 
evidence. 


Amount  of  capi 
ta]  stock  re- 
qui  -ed. 


deposit  are  to  be  carried  on,  designating  the  State,  Terri 
tory,  or  District,  and  also  the  particular  county  and  city, 
town,  or  village. 

Third.  The  amount  of  its  capital  stock,  and  the  number 
of  shares  into  which  the  same  shall  be  divided. 

Fourth.  The  names  and  places  of  residence  of  the  share 
holders,  and  the  number  of  shares  held  by  each  of  them. 

Fifth.  A  declaration  that  said  certificate  is  made  to  ena 
ble  such  persons  to  avail  themselves  of  the  advantages  of 
this  act. 

The  said  certificate  shall  be  acknowledged  before  a  judge 
of  some  court  of  record  or  a  notary  public,2  and  such  cer 
tificate,  with  the  acknowledgment  thereof  authenticated  by 
the  seal  of  such  court  or  notary,  shall  be  transmitted  to  the 
Comptroller  of  the  Currency,  who  shall  record  and  carefully 
preserve  the  same  in  his  office. 

Copies  of  such  certificate,  duly  certified  by  the  Comp 
troller,  and  authenticated  by  his  seal  of  office,  shall  be  legal 
and  sufficient  evidence  in  all  courts  and  places  within  the 
United  States,  or  the  jurisdiction  of  the  Government  thereof, 
of  the  existence  of  such  association,  and  of  every  other  mat 
ter  or  thing  which  could  be  proved  by  the  production  of  the 
original  certificate. 

CAPITAL  STOCK  REQUIRED. 

SEC.  7.  And  be  it  further  enacted,  That  no  association 
shall  be  organized  under  this  act,  with  a  less  capital  than 
one  hundred  thousand  dollars,  nor  in  a  city  whose  popula 
tion  exceeds  fifty  thousand  persons^  with  a  less  capital  than 
two  hundred  thousand  dollars :  Provided,  That  banks  with 
a  capital  of  not  less  than  fifty  thousand  dollars  may,  with 
the  approval  of  the  Secretary  of  the  Treasury,  be  organized 
in  any  place  the  population  of  which  does  not  exceed  six 
thousand  inhabitants. 

2.  In  an  action  by  a  national  bank,  in  which  the  certificate  of  the  Comp 
troller  is  produced  authorizing  the  bank  to  commence  business,  it  is  no  objec 
tion  to  its  legal  existence  that  the  acknowledgment  of  the  organizaiion  cer 
tificates  was  taken  before  a  notary  public  who  was  one  of  the  stockholders, 
That  is  a  question  for  the  Comptroller  only.  (Thatcher  v.  The  West  River 
National  Bank,  19  Michigan,  196.) 


CORPORATE  EXISTENCE,  POWERS,  &c.  105 

CORPORATE  EXISTENCE,  POWERS,  &C. 

SEC.  8.  And  be  it  further  enacted,  That  every  association  when  a  corpora- 
formed  pursuant  to  the  provisions  of  this  act  shall,  from  the 
date  of  the  execution  of  its  organization  certificate,  he  a  body 
corporate,  hut  shall  transact  no  business  except  such  as  may 
he  incidental  to  its  organization  and  necessarily  preliminary, 
until  authorized  by  the  Comptroller  of  the  Currency  to  com 
mence  the  business  of  hanking. 

Such  association  shall  have  power  to  adopt  a  corporate  May  adopt  a  seal 
seal,  and  shall  have  succession  by  the  name  designated  in  corporation  for 
its  organization  certificate,  for  the  period  of  twenty  years  twenty  years, 
from  its  organization,  unless  sooner  dissolved  according  to 
the  provisions  of  its  articles  of  association,  or  by  the  act  of 
its  shareholders  owning  two-thirds  of  its  stock,  or  unless  the 
franchise  shall  be  forfeited  by  a  violation  of  this  act ;  by  such 
name  it  may  make  contracts,  sue  and  be  sued, 3  complain  and  May  sue  and  be 
defend,  in  any  court  of  law  and  equity,  as  fully  as  natural  s 
persons; 

It  may  elect  or  appoint  directors,  and  by  its  board  of 
directors  appoint  a  president,  vice  president,  cashier,4  and 
other  officers,  define  their  duties,  require  beads  of  them  and 
fix  the  penalty  thereof,  dismiss  said  officers,  or  any  of  them, 
at  pleasure,6  and  appoint  others  to  fill  their  places; 

And  exercise  under  this  act  all  such  incidental  powers  as  what  business 
shall  be  necessary  to  carry  on  the  business  of  banking  by  ™day  be  transact* 
discounting  and  negotiating  promissory  notes,  drafts,  bills 
of  exchange,  and  other  evidences  of  debt;  by  receiving  de 
posits;  by  buying  and  selling  exchange,  coin,  and  bullion; 
by  loaning  money  on  personal  security  ;  by  obtaining,  issu- 

3.  See  section  50,  and  notes  thereon. 

4.  The  cashier  is  the  financial  officer,  or  the  executive  officer,  through  whom 
the  whole  financial  operations  of  the  bank  are  conducted.     The  directors  may 
limit  his  authority  as  they  deem  proper,  but  this  would  not  affect  those  to 
whom  the  limitations  were  unknown.     His  authority  to  do  particular  acts 
may  be  inferred  from  evidence  as  to  the  powers  exercised  by  him,  with  the 
knowledge  and  acquiescence  of  the  directors  and  the  usage  of  other  banks  in 
the  same  city.     (Merchants    Bank  v.  State  National  Bank,  10  Wallace,  604. 
The  Walcefield  Bank  v.  Truesdall,  55  Barbour,  602.) 

5.  The  directors  may  remove  the  president  even  before  any  by-laws  are 
adopted.     (Taylor  v.  Hutton,  43  Harbour,  195.) 


106 


BANKING  LAWS. 


ing,  and  circulating  notes  according  to  the  provisions  of 
this  act ; 

Transfer  of  stock.  And  its  board  of  directors  shall  also  have  power  to  define 
and  regulate  "by  by-laws,  not  inconsistent  with  the  pro 
visions  of  this  act,  the  manner  in  which  its  stock  shall  be 
transferred,6  its  directors  elected  or  appointed,  its  officers 
appointed,  its  property  transferred,  its  general  business  con 
ducted,  and  all  the  privileges  granted  by  this  act  to  associ 
ations  organized  under  it  shall  be  exercised  and  enjoyed  ; 

And  its  usual  business  shall  be  transacted  at  an  office  or 
banking-house  located  in  the  place  specified  in  its  organiza 
tion  certificate. 


Where  to  trans 
act  business. 


Directors  and 
president: 


•r 


—must  each  own 
ten  shares  and 
take  official  cath. 


DIRECTORS  AND  PRESIDENT. 

SEC.  9.  And  ~be  it  further  enacted^  That  the  affairs  of  every 
association  shall  be  managed  by  not  less  than  five  directors, 
one  of  whom  shall  be  the  president.  Every  director  shall, 
during  his  whole  term  of  service,  be  a  citizen  of  the  United 
States ;  and  at  least  three-fourths  of  the  directors  shall  have 
resided  in  the  State,  Territory,  or  district  in  which  such  asso 
ciation  is  located  one  year  next  preceding  their  election  as 
directors,  and  be  residents  of  the  same  during  their  contin 
uance  in  office. 

Each  director  shall  own,  in  his  own  right,  at  least  ten 
shares  of  the  capital  stock  of  the  association  of  which  he  is 
a  director.  Each  director,  when  appointed  or  elected,  shall 
take  an  oath  that  he  will,  so  far  as  the  duty  devolves  on  him. 
diligently  and  honestly  administer  the  affairs  of  such  asso 
ciation,  and  will  not  knowingly  violate,  or  willingly  permit 


6.  A  bank  whose  certificates  of  stock  declare  the  stockholders  entitled  to  a 
certain  number  of  shares,  transferable  in  person  or  by  attorney  on  the 
books  of  the  bank,  and  upon  a  surrender  of  the  certificates,  but  not  otherwise, 
and  which  permits  a  stockholder  to  transfer  his  shares  without  a  surrender 
of  his  certificates,  is  liable  for  value  of  the  same  stock  to  a  bona  fide  trans 
feree,  who  produces  the  certificates  with  a  properly  executed  power  of  attor 
ney  to  transfer.  (Bank  v.  Lanier,  11  Wallace,  369.) 

Banks  have  no  valid  liens  on  the  shares  of  stockholders  for  debts  due  from 
them  to  the  bank,  even  although  the  by-laws  and  the  certificates  of  stock 
set  forth  such  lien,  unless  the  bank  is  authorized  to  make  such  a  provision 
by  the  articles  of  association.  (Rosenback  v.  Salt  Springs  National  Bank,  35 
Barbour,  495;  Bank  v.  Lanier,  11  Wallace,  369.) 


DIRECTORS  AND  PRESIDENT,  107 

to  be  violated,  any  of  the  provisions  of  this  act,  and  that  lie 
is  the  bona  fide  owner,  in  his  own  right,  of  the  number  of 
shares  of  stock  required  by  this  act,  subscribed  by  him,  or 
standing  in  his  name  on  the  books  of  the  association,  and 
that  the  same  is  not  hypothecated,  or  in  any  way  pledged, 
rds  security  for  any  loan  or  debt :  which  oath,  subscribed  by 
himself,  and  certified  by  the  officer  before  whom  it  is  taken, 
shall  be  immediately  transmitted  to  the  Comptroller  of  the 
Currency,  and  by  him  filed  and  preserved  in  his  office. 

SEC.  10.  And  be  it  further  enacted.  That  the  directors  of  Term  of  on-e-- 
ariy  association  first  elected  or  appointed  shall  hold  their 
places  until  their  successors  shall  be  elected  and  qualified. 
All  subsequent  elections  shall  be  held  annually  on  such  day 
ir  the  month  of  January  as  may  be  specified  in  the  articles 
of  association  :  and  the  directors  so  elected  shall  hold  their 
places  for  one  year,  and  until  their  successors  are  elected 
and  qualified. 

But  any  director  ceasing  to  be  the  owner  of  the  requisite 
amount  of  stock,  or  having  in  any  other  manner  become  dis 
qualified,  shall  thereby  vacate  his  place.  Any  vacancy  in 
the  board  shall  be  filled  by  appointment  by  the  remaining 
directors,  and  any  director  so  appointed  shall  hold  his  place 
until  the  next  election. 

If  from  any  cause  an  election  of  directors  shall  not  be  made  Election,  when 
at  the  time  appointed,  the  association  shall  not  for  that  cause 
be  dissolved,  but  an  election  may  be  held  on  any  subsequent 
clay,  thirty  days'  notice  thereof  in  all  cases  having  been 
given  in  a  newspaper  published  in  the  city,  town,  or  county 
in  which  the  association  is  located ;  and  if  no  newspaper  is 
published  in  such  city,  town,  or  county,  such  notice  shall  be 
published  in  a  newspaper  published  nearest  thereto.  If  the 
articles  of  association  do  not  fix  the  day  on  which  the  elec 
tion  shall  be  held,  or  if  the  election  should  not  be  held  on 
tlio  day  fixed,  the  day  for  the  election  shall  be  designated 
by  the  board  of  directors  in  their  by-laws,  or  otherwise: 
Provided,  That  if  the  directors  fail  to  fix  the  day,  as  afore 
said,  shareholders  representing  two-thirds  of  the  shares  may. 

SEC.  11.  And  be  it  further  enacted,  That  in  all  elections  of  stockholders' 
directors,  and  in  deciding  all  questions  at  meetings  of  share-  votes :  proxies. 


108 


BANKING  LAWS. 


NO  officer,  &c., to  holders,  each  shareholder  shall  be  entitled  to  one  vote  on 
each  share  of  stock  held  by  him.  Shareholders  may  vote 
by  proxies  duly  authorized  in  writing ;  but  no  officer,  clerk, 
teller,  or  bookkeeper  of  such  association  shall  act  as  proxy ; 
and  no  shareholder  whose  liability  is  past  due  and  unpaid 
shall  be  allowed  to  vote. 


Shares  personal 
property;  trans 
ferable. 


Rights  and  lia 
bilities  of  share 
holders. 


CAPITAL  STOCK  AND  STOCKHOLDERS. 

SEC.  12.  And  be  it  farther  enacted,  That  the  capital  stock 
of  any  association  formed  under  this  act  shall  be  divided 
into  shares  of  one  hundred  dollars  each,  and  be  deemed  per 
sonal  property  and  transferable  on  the  books  of  the  associa 
tion  in  such  manner  as  may  be  prescribed  in  the  by-laws  or 
articles  of  association ;  and  every  person  becoming  a  share 
holder  by  such  transfer  shall,  in  proportion  to  his  shares, 
succeed  to  all  the  rights  and  liabilities  of  the  prior  holder 
of  such  shares,  and  no  change  shall  be  made  in  the  articles 
of  association  by  which  the  rights,  remedies,  or  security  of 
the  existing  creditors  of  the  association  shall  be  impaired. 

The  shareholders  of  each  association  formed  under  the 
provisions  of  this  act,  and  of  each  existing  bank  or  banking 
association  that  may  accept  the  provisions  of  this  act,  shall 
be  held  individually  responsible,  equally  and  ratably,  and 
not  one  for  another,  for  all  contracts,  debts,  and  engage 
ments  of  such  association  to  the  extent  of  the  amount  of 
their  stock  therein  at  the  par  value  thereof,  in  addition  to 
that  amount  invested  in  such  shares ; 7  except  the  sharehold 
ers  of  any  banking  association  now  existing  under  State  laws, 
having  not  less  than  five  millions  of  dollars  of  capital  actu 
ally  paid  in,  and  a  surplus  of  twenty  per  centum  on  hand, 
both  to  be  determined  by  the  Comptroller  of  the  Currency, 
shall  be  liable  only  to  the  amount  invested  in  their  shares : 

7.  The  liability  of  stockholders  is  several,  not  joint.  The  limit  of  their 
liability  is  the  par  of  the  stock  held  by  each  one.  Where  the  whole  amount 
is  sought  to  be  recovered  the  proceeding  must  be  at  law.  Where  less  is  re 
quired  the  proceeding  may  be  in  equity  for  contribution,  and  all  stockholders 
who  can  be  reached  by  the  process  of  the  court  may  be  joined  in  the  suit; 
but  it  is  no  objection  that  there  are  others  beyond  the  jurisdiction  of  the 
court,  who  cannot  for  that  reason  be  made  co-defendants.  (Kennedy  v.  Gibson 
et  al,  8  Wallace,  493.) 


CAPITAL  STOCK  AND  STOCKHOLDERS.  lO 

and  such  surplus  of  twenty  per  centum  shall  he  kept  undi- 
minished,  and  be  in  addition  to  the  surplus  provided  for  in 
this  act;  and  if  at  any  time  there  shall  he  a  deficiency  in 
said  surplus  of  twenty  per  centum,  the  said  hanking  associ 
ation  shall  not  pay  any  dividends  to  its  shareholders  until 
such  deficiency  shall  be  made  good ;  and  in  case  of  such  de 
ficiency,  the  Comptroller  of  the  Currency  may  compel  said 
banking  association  to  close  its  business  and  wind  up  its 
affairs  under  the  provisions  of  this  act. 

And  the  Comptroller  shall  have  authority  to  withhold  comptroller  may 
from  an  association  his  certificate  authorizing  the  commence- 
ment  of  business,  whenever  he  shall  have  reason  to  suppose  cases. 
that  the  shareholders  thereof  have  formed  the  same  for  any 
other  than  the  legitimate  objects  contemplated  by  this  act. 

SEC.  13.  And  be  it  further  enacted,  That  it  shall  be  lawful  increase  of  capi- 
for  any  association  formed  under  this  act,  by  its  articles  of  tal' 
association,  to  provide  for  an  increase  of  its  capital  from 
time  to  time  as  may  be  deemed  expedient,  subject  to  the 
limitations  of  this  act:  Provided,  That  the  maximum  of 
such  increase  in  the  articles  of  association  shall  be  deter 
mined  by  the  Comptroller  of  the  Currency;  and  no  increase 
of  capital  shall  be  valid  until  the  whole  amount  of  such 
increase  shall  be  paid  in,  and  notice  thereof  shall  have  been 
transmitted  to  the  Comptroller  of  the  Currency,  and  his 
certificate  obtained  specifying  the  amount  of  such  increase 
of  capital  stock,  with  his  approval  thereof,  and  -that  it  has 
been  duly  paid  in  as  part  of  the  capital  of  such  association. 

And  every  association  shall  have  power,  by  the  vote  of  Reduction  01 
shareholders  owning  two-thirds  of  its  capital  stock,  to  re-  caPitai- 
duce  the  capital  of  such  association  to  any  sum  not  below 
the  amount  required  by  this  act,  in  the  formation  of  associa 
tions:  Provided,  That  by  no  such  reduction  shall  its  capital  Proviso, 
be  brought  below  the  amount  required  by  this  act  for  its 
outstanding  circulation,  nor  shall  any  such  reduction  be 
made  until  the  amount  of  the  proposed  reduction  has  been 
reported  to  the  Comptroller  of  the  Currency  and  his  ap 
proval  thereof  obtained. 

SEC.  14.  And  be  it  further  enacted,  That  at  least  fifty  per  Fift^  Per  cent- of 

«,,  .,    /         T       P  .    ,.  i     n  ,  • -,     capital  to  be  paid 

centum  of  the  capital  stock  of  every  association  shall  be  paid  in- 


110 


BANKING  LAWS. 


before  com 
mencing  busi 
ness. 


Rt'ick  of  delin 
quent  stockhold 
er.*,  how  sold. 


Bonds  to  be  de 
posited— 


in  before  it  shall  be  authorized  to  commence  business ;  and 
the  remainder  of  the  capital  stock  of  such  association  shall 
be  paid  in  installments  of  at  least  ten  per  centum  each  on 
the  whole  amount  of  the  capital  as  frequently  as  one  install 
ment  at  the  end  of  each  succeeding  month  from  the  time  it 
shall  be  authorized  by  the  Comptroller  to  commence  busi 
ness;  and  the  payment  of  each  installment  shall  be  certified 
to  the  Comptroller,  under  oath,  by  the  president  or  cashier 
of  the  association. 

SEC.  15.  And  be  it  further  enacted,  That  if  any  share 
holder,  or  his  assignee,  shall  fail  to  pay  any  installment  on 
the  stock  when  the  same  is  required  by  the  foregoing  section 
to  be  paid,  the  directors  of  such  association  may  sell  the  stock 
of  such  delinquent  shareholder  at  public  auction,  having 
given  three  weeks'  previous  notice  thereof  in  a  newspaper 
published  and  of  general  circulation  in  the  city  or  county 
where  the  association  is  located,  and  if  no  newspaper  is  pub 
lished  in  said  city  or  county,  then  in  a  newspaper  published 
nearest  thereto,  to  any  person  who  will  pay  the  highest  price 
therefor,  and  not  less  than  the  amount  then  due  thereon, 
with  the  expenses  of  advertisement  and  sale ;  and  the  excess, 
if  any,  shall  be  paid  to  the  delinquent  shareholder. 

If  no  bidder  can  be  found  who  will  pay  for  such  stock  the 
amount  due  thereon  to  the  association,  and  the  cost  of  ad 
vertisement  and  sale,  the  amount  previously  paid  shall  be 
forfeited  to  the  association,  and  such  stock  shall  be  sold;  as 
the  directors  may  order,  within  six  months  from  the  time 
of  such  forfeiture,  and  if  not  sold  it  shall  be  canceled  and 
deducted  from  the  capital  stock  of  the  association;  and  if 
such  cancellation  and  reduction  shall  reduce  the  capital  or 
the  association  below  the  minimum  of  capital  required  by 
this  act,  the  capital  stock  shall,  within  thirty  days  from  the 
date  of  such  cancellation,  be  increased  to  the  requirements 
of  the  act ;  in  default  of  which  a  receiver  may  be  appointed 
to  close  up  the  business  of  the  association  according  to  the 
provisions  of  the  fiftieth  section  of  this  act. 

DEPOSIT  OF  UNITED  STATES  BONDS. 

SEC.  16.  And  be  it  further  enacted,  That  every  association, 
after  having  complied  with  the  provisions  of  this  act,  pro- 


CERTIFICATE  OF  ORGANIZATION.  Ill 

liminary  to  the  commencement  of  banking  business  under  —  before  com- 
its   provisions,  and   before  it  shall  be  authorized  to  com-  ™eeSsCmsbu 
mence  business,  shall  transfer  and  deliver  to  the  Treasurer 
of  the  United  States  any  United  States  registered  bonds 
bearing  interest  to  an  amount  not  less  than  thirty  thousand 
dollars  nor  less  than  one-third  of  the  capital  stock  paid  in, 
which  bonds  shall  be  deposited  with  the  Treasurer  of  the 
United  States,  and  by  him  safely  kept  in  his  office  until  the 
same  shall  be  otherwise  disposed  of  in  pursuance  of  the 
provisions  of  this  act; 

And  the  Secretary  of  the  Treasury  is  hereby  authorized 
to  receive  and  cancel  any  United  States  coupon  bonds,  and 
to  issue  in  lieu  thereof  registered  bonds  of  like  amount, 
bearing  a  like  rate  of  interest,  and  having  the  same  time 
to  run ;  and  the  deposit  of  bonds  shall  be,  by  every  associa 
tion,  increased  as  its  capital  may  be  paid  up  or  increased, 
so  that  every  association  shall  at  all  times  have  on  deposit 
with  the  Treasurer  registered  United  States  bonds  to  the 
amount  of  at  least  one-third  of  its  capital  stock  actually 
paid  in : 

Provided,  That  nothing  in  this  section  shall  prevent  an 
association  that  may  desire  to  reduce  its  capital  or  to  close 
up  its  business  and  dissolve  its  organization  from  taking  up 
its  bonds  upon  returning  to  the  Comptroller  its  circulating 
notes  in  the  proportion  hereinafter  named  in  this  act,  nor 
from  taking  up  any  excess  of  bonds  beyond  one-third  of  its 
capital  stock  and  upon  which  no  circulating  notes  have 
been  delivered. 

CERTIFICATE  OF  ORGANIZATION. 

SEC.  17.  And  be  it  further  enacted,  That  whenever  a  cer-  Examination  by 
tificate  shall  have  been  transmitted  to  the  Comptroller  of  SS^J^ 
the  Currency,  as  provided  in  this  act,  and  the  association   ing  certificate. 
transmitting  the  same  shall  notify  the  Comptroller  that  at 
least  fifty  per  centum  of  its  capital  stock  has  been  paid  in 
as  aforesaid,  and  that  such  association  has  complied  with  all 
the  provisions  of  this  act  as  required  to  be  complied  with 
before  such  association  shall  be  authorized  to  commence  the 
business  of  banking,  the  Comptroller  shall  examine  into  the 


112 


BANKING  LAWS. 


When  certificate 


—publication 
thereof. 


Transfer  of  bonds 
deposited — 
how  made. 


condition  of  such  association,  ascertain  especially  the  amount 
of  money  paid  in  on  account  of  its  capital,  the  name  and 
place  of  residence  of  each  of  the  directors  of  such  associa 
tion,  and  the  amount  of  the  capital  stock  of  which  each  is 
the  bona  fide  owner,  and  generally  whether  such  association 
has  complied  with  all  the  requirements  of  this  act  to  entitle 
it  to  engage  in  the  business  of  banking;  and  shall  cause  to 
be  made  and  attested,  by  the  oaths  of  a  majority  of  the  di 
rectors  and  by  the  president  or  cashier  of  such  association, 
a  statement  of  all  the  facts  necessary  to  enable  the  Comp 
troller  to  determine  whether  such  association  is  lawfully  en 
titled  to  commence  the  business  of  banking  under  this  act. 
SEC.  18.  And  be  it  further  enacted.  That  if,  upon  a  careful 
examination  of  the  facts  so  reported,  and  of  any  other  facts 
which  may  come  to  the  knowledge  of  the  Comptroller, 
whether  by  means  of  a  special  commission  appointed  by 
him  for  the  purpose  of  inquiring  into  the  condition  of  such 
association  or  otherwise,  it  shall  appear  that  such  associa 
tion  is  lawfully  entitled  to  commence  the  business  of  bank 
ing,  the  Comptroller  shall  give  to  such  association  a  certifi 
cate,  under  his  hand  and  official  seal,  that  such  association 
has  complied  with  all  the  provisions  of  thi*  act  required  to 
be  complied  with  before  being  entitled  to  o.nnmence  the 
business  of  banking  under  it,  and  that  sue.1!  association  is 
authorized  to  commence  said  business  accordingly ;  and  it 
shall  be  the  duty  of  the  association  to  cause  said  certificate 
to  be  published  in  some  newspaper  published  in  the  city  or 
county  where  the  association  is  located  for  at  least  sixty 
days  next  after  the  issuing  thereof:  Provided,  That  if  no 
newspaper  is  published  in  such  city  or  county,  the  certifi 
cate  shall  be  published  in  a  newspaper  published  nearest 
thereto. 

TRANSFER  OF  BONDS  TO  TREASURER. 

SEC.  19.  And  be  it  further  enacted,  That  all  transfers  of 
United  States  bonds  which  shall  be  made  by  any  association 
under  the  provisions  of  this  act  shall  be  made  to  the  Treas 
urer  of  the  United  States  in  trust  for  the  association,  with  a 
memorandum  written  or  printed  on  each  bond,  and  signed 
by  the  cashier  or  some  other  officer  of  the  association  mak- 


CIRCULATING  NOTES. 

Ing  the  deposit,  a  receipt  therefor  to  be  given  to  said  asso 
ciation,  or  by  the  Comptroller  of  the  Currency,  or  by  a  clerk 
appointed  by  him  for  that  purpose,  stating  that  it  is  held  in 
trust  for  the  association  on  whose  behalf  such  transfer  is 
made,  and  as  security  for  the  redemption  and  payment  of 
any  circulating  notes  that  have  been  or  may  be  delivered  to 
such  association. 

No  assignment  or  transfer  of  any  such  bonds  by  the  Treas-  comptroller  to 
urer  shall  be  deemed  valid  or  of  binding  force  and  effect  transfers-80 
unless  countersigned  by  the  Comptroller  of  the  Currency. 
It  shall  be  the  duty  of  the  Comptroller  of  the  Currency  to 
keep  in  his  office  a  book  in  which  shall  be  entered  the  name  —keep  transfer 
of  every  association  from  whose  accounts  such  transfer  of 
bonds  is  made  by  the  Treasurer,  and  the  name  of  the  party 
to  whom  such  transfer  is  made ;  and  the  par  value  of  the 
bonds  so  transferred  shall  be  entered  therein ;  and  it  shall 
be  the  duty  of  the  Comptroller,  immediately  upon  counter 
signing  and  entering  the  same,  to  advise  by  mail  the  asso-  —and  notify 
ciation  from  whose  account  such  transfer  was  made  of  the  p^rtl 
kind  and  numerical  designation  of  the  bonds  and  the  amount 
thereof  so  transferred. 

SEC.  20.  And  be  it  further  enacted,  That  it  shall  be  the  —to  have  access 
duty  of  the  Comptroller  of  the  Currency  to  countersign  and  bookgTnd^freas 
enter  in  the  book,  in  the  manner  aforesaid,  every  transfer  urer  to  ins  books. 
or  assignment  of  any  bonds  held  by  the  Treasurer  presented 
for  his  signature;  and  the  Comptroller  shall  have  at  all 
times  during  office  hours  access  to  the  books  of  the  treas 
urer,  for  the  purpose  of  ascertaining  the  correctness  of  the 
transfer  or  assignment  presented  to  him  to  countersign  ;  and 
the  Treasurer  shall  have  the  like  access  to  the  book  above 
mentioned,  kept  by  the  Comptroller,  during  office  hours,  to 
ascertain  the  correctness  of  the  entries  in  the  same ;  and  the 
Comptroller  shall  also  at  all  times  have  access  to  the  bonds 
on  deposit  with  the  Treasurer,  to  ascertain  their  amount  and 
condition. 

CIRCULATING  NOTES. 

SEC.  21.  And  be  it  further  enacted,  That  upon  the  transfer  circulating  notea 
and  delivery  of  bonds  to  the  Treasurer,  as  provided  in  the  J°  be  dehvere<] to 

17  '  A  banks,  amount, 

foregoing  section,  the  association  making  the  same  shall  be  proportion,  &c. 
8 


H4  BANKING  LAWS. 

entitled  to  receive  from  tlie  Comptroller  of  the  Currency  cir 
culating  notes  of  different  denominations  in  blank,  regis 
tered  and  countersigned  as  hereinafter  provided,  equal  in 
amount  to  ninety  per  centum  of  the  current  market  value  of 
the  United  States  "bonds  so  transferred  and  delivered,  but 
not  exceeding  ninety  per  centum  of  the  amount  of  said 
bonds  at  the  par  value  thereof,  if  bearing  interest  at  a  rate 
not  less  than  five  per  centum  per  annum ;  and  the  amount 
of  such  circulating  notes  to  be  furnished  to  each  association 
shall  be  in  proportion  to  its  paid-up  capital,  as  follows,  and 
no  more; 

To  each  association  whose  capital  shall  not  exceed  five 

hundred  thousand  dollars,  ninety  per  centum  of  such  capital ; 

To  each  association  whose  capital  exceeds  five  hundred 

thousand  dollars,  but  does  not  exceed  one  million  dollars, 

eighty  per  centum  of  such  capital ; 

To  each  association  whose  capital  exceeds  one  million  dol 
lars,  but  does  not  exceed  three  millions  of  dollars,  seventy- 
.     five  per  centum  of  such  capital ; 

To  each  association  whose  capital  exceeds  three  millions 
of  dollars,  sixty  per  centum  of  such  capital; 

Apportionment  And  that  one  hundred  and  fifty  millions  of  dollars  of  the 
among t'he states  en^re  amount  °f  circulating  notes  authorized  to  be  issued 
shall  be  apportioned  to  associations  in  the  States,,  in  the 
District  of  Columbia,  and  in  the  Territories,  according  to 
representative  population,  and  the  remainder  shall  be  ap 
portioned  by  the  Secretary  of  the  Treasury  among  associa 
tions  formed  in  the  several  States,  in  the  District  of  Colum 
bia,  and  in  the  Territories, 8  having  due  regard  to  the  existing 
banking  capital,  resource,  and  business  of  such  State,  Dis 
trict,  and  Territory.  [As  amended  by  act  of  March  3,  1865, 
chapter  82.] 

Limitation  Df  SEC.  22.  And  be  it  further  enacted,  That  the  entire  amount 

amount.  of  notes  for  circulation  to  be  issued  under  this  act  shall  not 

exceed  three  hundred  millions  of  dollars.9 


8.  The  act  of  July  12, 1870,  chapter  252.  section  6,  provides  for  a  re-distribu 
tion  of  $25,000,000  of  circulation,  to  be  taken  from  the  banks  of  States  having 
an  excess,  and  given  to  those  of  States  having  less  than  their  proportion. 

9.  The  amount  of  currency  notes  which  may  be  issued  is  increased  $54,- 
000,000  by  the  act  of  July  12,  1870,  section  1,  to  be  apportioned  as  therein 


CIRCULATING  NOTES.  115 

In   order   to   furnish   suitable   notes  for   circulation,  the  Plates  and  die?, 
Comptroller  of  the  Currency  is  hereby  authorized  and  re-  r 
quired,  under  the  direction  of  the  Secretary  of  the  Treasury, 
to  cause  plates  and  dies  to  be  engraved,  in  the  best  manner 
to  guard  against  counterfeiting  and  fraudulent  alterations, 
and  to  have  printed  therefrom  and  numbered  such  quan 
tity  of  circulating  notes,  in  blank,  of  the  denominations  of  •  Denomination  01 
one  dollar,  two  dollars,  three  dollars,  five  dollars,  ten  dol 
lars,  twenty  dollars,  fifty  dollars,  one  hundred  dollars,  five 
hundred  dollars,  and  one  thousand  dollars,  as  may  be  re 
quired  to  supply,  under  this  act,  the  associations  entitled 
to  receive  the  same  : 

Which  notes  shall  express  upon  their  face  that  they  are  Notes,  what  to  ex- 
secured  by  United  States  bonds,  deposited  with  the  Treasu-  press< 
rer  of  the  United  States  by  the  written  or  engraved  signa 
tures  of  the  Treasurer  and  Register,  and  by  the  imprint  of 
the  seal  of  the  Treasury ;  and  shall  also  express  upon  their 
face  the  promise  of  the  association  receiving  the  same- to  pay 
on  demand,  attested  by  the  signatures  of  the  president  or 
vice  president  and  cashier.  And  the  said  notes  shall  bear 
such  devices  and  such  other  statements,  and  shall  be  in  such 
form,  as  the  Secretary  of  the  Treasury  shall  by  regulation 
direct: 

Provided,  That  not  more  than  one-sixth  part  of  the  notes  Limit  to  number 
furnished  to  an  association  shall  be  of  a  less  denomination   ofnotesunde^5- 
than  five  dollars,  and  that  after  specie  payments  shall  be 
resumed  no  association  shall  be  furnished  with  notes  of  a 
less  denomination  than  five  dollars. 

SEC.  23.   And  be  it  further  enacted,  That   after  any  such   when  banks  may 
association  shall  have  caused  its  promise  to  pay  such  notes  l 
on  demand  to  be  signed  by  the  president  or  vice  president 
and  cashier  thereof,  in  such  manner  as  to  make  them  oblig 
atory  promissory  notes,  payable  on  demand,  at  its  place  of 
business,  such  association  is  hereby  authorized  to  issue  and 
circulate  the  same  as  money  ; 

provided;  and  no  banking  association  organized  after  that  date  can  have  a 
. circulation  of  currency  notes  in  excess  of  $500,000. 

A  national  gold  bank  may  have  a  circulation  of  gold  notes  to  an  amount 
not  exceeding  $1,000,000,  and  there  is  no  limit  to  the  aggregate  amount  which 
may  be  iss'ied.  (See  Act  of  July  1 2,  1870,  chapter  252,  sec.  3.) 


116 


BANKING  LAWS. 


For  what  the 
notes  tin  receiv 
able. 


Banks  to  issue  no 
other  notes. 


Replacing  of 
worn-out,  mutila 
ted,  or  lost  notes. 


Mutilated  notes, 
tc.,  to  be  burned. 


And  the  same  shall  be  received  at  par  in  all  parts  of  thp 
United  States  in  payment  of  taxes,  excises,  public  lands,  and 
all  other  dues  to  the  United  States,  except  for  duties  on  im 
ports  ;  and  also  for  all  salaries  and  other  debts  and  demands 
owing  by  the  United  States  to  individuals,  corporations,  and 
associations  within  the  United  States,  except  interest  on  the 
public  debt,  and  in  redemption  of  the  national  currency. 

And  no  such  association  shall  issue  post  notes  or  any  other 
notes  to  circulate  as  money  than  such  as  are  authorized  by 
the  foregoing  provisions  of  this  act. 

SEC.  24.  And  be  it  further  enacted,  That  it  shall  be  the 
duty  of  the  Comptroller  of  the  Currency  to  receive  worn-out 
or  mutilated  circulating  notes  issued  by  any  such  banking 
association,  and  also,  on  due  proof  of  the  destruction  of  any 
such  circulating  notes,  to  deliver  iri  place  thereof  to  such 
association  other  blank  circulating  notes  to  an  equal  amount. 

And  such  worn-out  or  mutilated  notes,  after  a  memoran 
dum  shall  have  been  entered  in  the  proper  books,  in  accord 
ance  with  such  regulations  as  may  be  established  by  the 
Comptroller,  as  well  as  all  circulating  notes  which  shall 
have  been  paid  or  surrendered  to  be  canceled,  shall  be 
burned  to  ashes  in  presence  of  four  persons,  one  to  be  ap 
pointed  by  the  Secretary  of  the  Treasury,  one  by  the  Comp 
troller  of  the  Currency,  one  by  the  Treasurer  of  the  United 
States,  and  one  by  the  association,  under  such  regulations 
as  the  Secretary  of  the  Treasury  may  prescribe.  And  a  cer 
tificate  of  such  burning,  signed  by  the  parties  so  appointed, 
shall  be  made  in  the  books  of  the  Comptroller,  and  a  dupli 
cate  thereof  forwarded  to  the  association  whose  notes  are  thus 
canceled. 


Bonds  to  be  ex 
amined  annually 
by  agents  of 
bunks. 


PROVISION  CONCERNING  BONDS  HELD  BY  TREASURER. 

SEC.  25.  At^d  be  it  further  enacted,  That  it  shall  be  the 
duty  of  every  banking  association  having  bonds  deposited 
in  the  office  of  the  Treasurer  of  the  United  States,  once  or 
oftener  in  each  fiscal  year,  and  at  such  time  or  times  during 
the  ordinary  business  hours  as  said  officer  or  officers  may 
select,  to  examine  and  compare  the  bonds  so  pledged  with 
the  books  of  the  Comptroller  and  the  accounts  of  the  asso- 


BONDS  DEPOSITED.  117 

elation,  and,  if  found  correct,  to  execute  to  the  said  Treas 
urer  a  certificate  setting  forth  the  different  kinds  and  the 
amounts  thereof,  and  that  the  same  are  in  the  possession 
and  custody  of  the  Treasurer  at  the  date  of  such  certificate. 
Such  examination  may  be  made  by  an  officer  or  agent  of 
such  association,  duly  appointed  in  writing  for  that  pur 
pose,  whose  certificate  before  mentioned  shall  be  of  like 
force  and  validity  as  if  executed  by  such  president  or  cash 
ier;  and  a  duplicate  signed  by  the  Treasurer  shall  be 
retained  by  the  association. 

SEC.  26.   And  be  it  further  enacted.  That  the  bonds  trans-   Bonds  to  be  hoi«i 
ferred  to  and  deposited  with  the  Treasurer  of  the  United   exclusively  for 

1  redemption  ot 

States,  as  hereinbefore  provided,  by  any  banking  associa-  notes. 
tion  for  the  security  of  its  circulating  notes,  shall  be  held 
exclusively  for  that  purpose,  until  such  notes  shall  be  re 
deemed,  except  as  provided  in  this  act; 

But  the  Comptroller  of  the  Currency  shall  give  to  any  -interest  on, 
such  banking  association  powers  of  attorney  to  receive  and  ^ni-s'01 
appropriate  to  its  own  use  the  interest  on  the  bonds  which 

it  shall  have  so  transferred  to  the  Treasurer;   but  such 

< 

powers  shall  become  inoperative  whenever  such  banking 
association  shall  fail  to  redeem  its  circulating  notes  as 
aforesaid. 

Whenever   the  market  or  cash  value  of  any  bonds  de-  -when  market 
posited  with  the  Treasurer  of  the  United  States,  as  afore-  ^0^0^^ 
said,  shall  be  reduced  below  the  amount  of  the  circulation  intion,  additional 
issued  for  the  same,  the  Comptroller  of  the  Currency  is  ^sitecT 
hereby  authorized   to  demand  and  receive  the  amount  of 
such  depreciation  in   other   United   States  bonds  at  cash 
value,   or  in   money,   from   the   association   receiving   said 
bills,  to  be  deposited  with  the   Treasurer  of  the  United 
States  as  long  as  such  depreciation  continues. 

And  said  Comptroller,  upon  the  terms  prescribed  by  the  -may  be  ex- 
Secretary  of  the  Treasury,  may  permit  an  exchange  to  be 
made  of  any  of  the  bonds  deposited  with  the  Treasurer  by 
an  association  for  other  bonds  of  the  United  States  author 
ized  by  this  act  to  be  received  as  security  for  circulating 
notes,  if  he  shall  be  of  opinion  that  such  an  exchange  can 
be  made  without  prejudice  to  the  United  States,  and  he  may 


118 


BANKING  LAWS. 


Jnlawful  issue 
of  notes  to  asso 
ciations — 
penalty  incurred. 


direct  the  return  of  any  of  said  bonds  to  the  banking  asso 
ciation  which  transferred  the  same,  in  sums  of  not  less  than 
one  thousand  dollars,  upon  the  surrender  to  him  and  the 
cancellation  of  a  proportionate  amount  of  such  circulating 
notes: 

Provided,  That  the  remaining  bonds  which  shall  have 
been  transferred  by  the  banking  association  offering  to  sur 
render  circulating  notes  shall  be  equal  to  the  amount  re 
quired  for  the  circulating  notes  not  surrendered  by  such 
banking  association,  and  that  the  amount  of  bonds  in  the 
hands  of  the  Treasurer  shall  not  be  diminished  below  the 
amount  required  to  be  kept  on  deposit  with  him  by  this  act: 

And  provided,  That  there  shall  have  been  no  failure  by 
such  association  to  redeem  its  circulating  notes,  and  no 
other  violation  by  such  association  of  the  provisions  of  this 
act,  and  that  the  market  or  cash  value  of  the  remaining 
bonds  shall  not  be  below  the  amount  required  for  the  circu 
lation  issued  for  the  same. 

SEC.  27.  And  be  it  further  enacted.  That  it  shall  be  un 
lawful  for  any  officer  acting  under  the  provisions  of  this  act 
to  countersign  or  deliver  to  any  association,  or  to  any  other 
company  or  person,  any  circulating  notes  contemplated  by 
this  act,  except  as  hereinbefore  provided,  and  in  accordance 
with  the  true  intent  and  meaning  of  this  act.  And  any 
officer  who  shall  violate  the  provisions  of  this  section  shall 
be  deemed  guilty  of  a  high  misdemeanor,  and  on  conviction 
thereof  shall  be  punished  by  fine  not  exceeding  double  the 
amount  so  countersigned  and  delivered,  and  imprisonment 
not  less  than  one  year  and  not  exceeding  fifteen  years,  at 
the  discretion  of  the  court  in  which  he  shall  be  tried. 


Hanks  may  hold 
and  convey  real 


BANKS  MAY  HOLD  HEAL  ESTATE. 

SEC.  28.  ^And  be  it  further  enacted,  That  it  shall  be  lawful 
for  any  such  association  to  purchase,  hold,  and  convey  real 
estate  as  follows:  — 

-to  what  extent.       First.  Such  as  shall  be  necessary  for  its  immediate  accom 
modation  in  the  transaction  of  its  business. 

Second.  Such  as  shall  be  mortgaged  to  it  in  good  faith  by 
way  of  security  for  debts  previously  contracted. 


LOANS  AND  DISCOUNTS.  110 

Third.  Such  as  shall  be  conveyed  to  it  in  satisfaction  of 
debts  previously  contracted  in  the  course  of  its  dealings. 

Fourth.  Such  as  it  shall  purchase  at  sales  under  judg 
ments,  decrees,  or  mortgages  held  by  such  association,  or 
shall  purchase  to  secure  debts  due  to  said  association. 

And  such  association  shall  not  purchase  or  hold  real  es-  General  nmita- 
tate  in  any  other  case  or  for  any  other  purpose  than  as  spe-  1 
cified  in  this  section.     Nor  shall  it  hold  the  possession  of  any 
real  estate  under  mortgage,  or  hold  the  title  and  possession 
of  any  real  estate  purchased  to  secure  any  debts  due  to  it 
for  a  longer  period  than  five  years. 

LOANS  AND  DISCOUNTS. 

SEC.  29.  And  be  it  further  enacted,  That  the  total  liabili-  Loans  limited. 
ties  to  any  association,  of  any  person,  or  of  any  company, 
corporation,  or  firm  for  money  borrowed,,  including  in  the 
liabilities  of  a  company  or  firm  the  liabilities  of  the  several 
members  thereof,  shall  at  no  time  exceed  one-tenth  part  of 
the  amount  of  the  capital  stock  of  such  association  actually 
paid  in :  Provided,  That  the  discount  of  bona  fide  bills  of 
exchange  drawn  against  actually  existing  values,  and  the 
discount  of  commercial  or  business  paper  actually  owned  by 
the  person  or  persons,  corporation,  or  firm  negotiating  the 
same,  shall  not  be  considered  as  money  borrowed. 

SEC.  30.  And  be  it  further  enacted,  That  every  association  interest  O^K*..,, 
may  take,  receive,  reserve,  arid  charge,  on  any  loan  or  dis-  anddiecouut* 
count  made,  or  upon  any  note,  bill  of  exchange,  or  other 
evidences  of  debt,  interest  at  the  rate  allowed  by  the  laws 
of  the  State  or  Territory  where  the  bank  is  located,  and  no 
more,  except  that  where  by  the  laws  of  any  State  a  different 
rate  is  limited  for  banks  of  issue  organized  under  State  laws, 
the  rates  so  limited  shall  be  allowed  for  associations  organ 
ized  in  any  such  State  under  this  act. 

And  when  no  rate  is  fixed  by  the  laws  of  the  State  or 
Territory,  the  bank  may  take,  receive,  reserve,  or  charge  a 
rate  not  exceeding  seven  per  centum,  and  such  interest  may 
be  taken  in  advance,  reckoning  the  days  for  which  the  note, 
bill,  or  other  evidence  of  debt  has  to  run. 

And  the  knowingly  taking,  receiving,  reserving,  or  charg- 


120 


BANKING  LAWS. 


—penalties  in 
curred. 


Exehang  ?  may  be 
charged. 


Banks  to  hold 
certain  reserves. 


In  case  of  defi 
ciency— 


iiig  a  rate  of  interest  greater  than  aforesaid  shall  be  held 
and  adjudged  a  forfeiture  of  the  entire  interest  which  the 
note,  bill,  or  other  evidence  of  debt  carries  with  it,  or  which 
has  been  agreed  to  be  paid  thereon.  And  in  case  a  greater 
rate  of  interest  has  been  paid,  the  person  or  persons  paying 
the  same,  or  their  legal  representatives,  may  recover  back, 
in  any  action  of  debt,  twice  the  amount  of  the  interest  thus 
paid  from  the  association  taking  or  receiving  the  same: 
Provided.  That  such  action  is  commenced  within  two  years 
from  the  time  the  usurious  transaction  occurred. 

But  the  purchase,  discount,  or  sale  of  a  bona  fide  bill  of 
exchange,  payable  at  another  place  than  the  place  of  such 
purchase,  discount,  or  sale,  at  not  more  than  the  current 
rate  of  exchange  for  sight  drafts  in  addition  to  the  interest, 
shall  not  be  considered  as  taking  or  receiving  a  greater  rate 
of  interest. 

LEGAL  RESERVES  REQUIRED. 

SEC.  31.  And  be  it  further  enacted,  That  every  association 
in  the  cities  hereinafter  named  shall  at  all  times  have  on 
hand,  in  lawful  money  of  the  United  States,  an  amount 
equal  to  at  least  twenty-five  per  centum  of  the  aggregate 
amount  of  its  notes  in  circulation  and  its  deposits;  and 
every  other  association  shall,  at  all  times,  have  on  hand,  in 
lawful  money  of  the  United  States,  an  amount  equal  to  at 
least  fifteen  per  centum  of  the  aggregate  amount  of  its  notes 
in  circulation  and  of  its  deposits. 1  ° 

And  whenever  the  lawful  money  of  any  association  in  any 
of  the  cities  hereinafter  named  shall  be  below  the  amount 
of  twenty -five  per  centum  of  its  circulation  and  deposits,. 
and  whenever  the  lawful  money  of  any  other  association 
shall  be  below  fifteen  per  centum  of  its  circulation  and  de- 

10.  By  the  act  of  March  2,  1867,  chapter  194,  the  temporary  loan  certifi 
cates,  or  three  per  cent,  certificates,  authorized  by  that  act,  may  be  held  as 
part  of  the  national  bank  reserves,  subject  to  the  limitation  that  not  less  than 
two-fifths  of  the  entire  reserve  of  any  bank  shall  consist  of  lawful  money  of 
the  United  States. 

And  by  act  of  June  8,  1872,  chapter  346,  the  certificates  of  deposit  there 
in  provided  for,  to  bo  issued  in  exchange  for  United  States  notes,  may  be 
held  as  part  of  the  legal  reserves  of  banks,  and  may  be  accepted  in  the  set 
tlement  of  clearing-house  balances.  (See  pp.  27,  28.) 


LEGAL  RESERVES.  12J 


posits,  such  association  shall  not  increase  its  liabilities  by  —certain 

,  .  .  T  ,  -i  IT        tions  imposed. 

making  any  new  loans  or  discounts  otherwise  than  by  dis 
counting  or  purchasing  bills  of  exchange  payable  at  sight, 
nor  make  any  dividend  of  its  profits  until  the  required  pro 
portion  between  the  aggregate  amount  of  its  outstanding 
notes  of  circulation  and  deposits  and  its  lawful  money  of  the 
United  States  shall  be  restored: 

Provided,  That  three-fifths  of  said  fifteen  per  centum  may 
consist  of  balances  duo  to  an  association  available  for  the  re 
demption  of  its  circulating  notes  from  associations  approved 
by  the  Comptroller  of  the  Currency.,  organized  under  this  act, 
in  the  cities  of  Saint  Louis,  Louisville,  Chicago,  Detroit, 
Milwaukee,  New  Orleans,  Cincinnati,  Cleveland,  Pittsburg, 
Baltimore,  Philadelphia,  Boston,  New  York,  Albany,  Leav- 
tnu  orth  *  &&YL  Francisco,  and  Washington  city: 

Provided,  also,  That  clearing-house  certificates,  repre 
senting  specie  or  lawful  money  specially  deposited  for  the 
purpose  of  any  clearing-house  association,  shall  be  deemed 
to  be  lawful  money  in  the  possession  of  any  association  be 
longing  to  such  clearing-house  holding  and  owning  such 
certificate,  and  shall  be  considered  to  be  a  part  of  the  law 
ful  money  which  such  association  is  required  to  have  under 
the  foregoing  provisions  of  this  section  : 

Provided,  That  the  cities  of  Charleston  and  Eichmond 
may  be  added  to  the  list  of  cities  in  the  national  associations 
of  which  other  associations  may  keep  three-fifths  of  their 
lawful  money,  whenever,  in  the  opinion  of  the  Comptroller 
of  the  Currency,  the  condition  of  the  southern  States  will 
warrant  it. 

And  it  shall  be  competent  for  the  Comptroller  of  the  in  default  of  ?uf- 
Currency  to  notify  any  association   whose  lawful  money  ^^0^0^11]- 
reserve  as  aforesaid  shall  be  below  the  amount  to  be  kept  may  be  wound  up. 
on  hand  as  aforesaid,  to  make  good  such  reserve;  and  if 
such   association   shall   fail   for   thirty   days   thereafter  so 
to  make  good  its  reserve  of  lawful  money  of  the  United 
States,  the  Comptroller  may,  with  the  concurrence  of  the 
Secretary  of  the  Treasury,  appoint   a  receiver11  to  wind 
up  the  business  of  such  association,  as  provided  in  this  act. 

*  Leavenwortb  is  stricken  out  by  act  of  March  1,  1872. 
11.  Sef  section  50,  and  notes  thereto,  pp.  133,  134. 


122  BANKING  LAWS. 

REDEMPTION  AGENCIES. 

Redemption  SEC.  32.  And  be  it  further  enacted,  That  each  association 

YorkCtoSbet8e-eW    organized  in  any  of  the  cities  named  in  the  foregoing  sec- 
lected—  tion  shall  select,  subject  to  the  approval  of  the  Comptroller 

of  the  Currency,  an  association  in  the  city  of  New  York  at 
which  it  will  redeem  its  circulating  notes  at  par.1-     And 
-where  part  of     each  of  such  associations  may  keep  one-half  of  its  lawful 
reserves  >    money  reserve  in  cash  deposits  in  the  city  of  New  York. 

Like  agencies  in  And  each  association  not  organized  within  the  cities 
named  in  the  preceding  section  shall  select,  subject  to  the 
approval  of  the  Comptroller  of  the  Currency,  an  association 
in  either  of  the  cities  named  in  the  preceding  section  at 
which  it  will  redeem  its  circulating  notes  at  par,  and  the 
Comptroller  shall  give  public  notice  of  the  names  of  the  as 
sociations  so  selected  at  which  redemptions  are  to  be  made 
by  the  respective  associations,  and  of  any  change  that  may 
be  made  of  the  association  at  which  the  notes  of  any  asso 
ciation  are  redeemed. 

If  any  association  shall  fail  either  to  make  the  selection 

or  to  redeem  its  notes  as  aforesaid,  the  Comptroller  of  the 

Currency  may,  upon  receiving  satisfactory  evidence  thereof, 

appoint  a  receiver,  in  the  manner  provided  for  in  this  act, 

Banks  to  redeem  to  wind  up  its  affairs  I   Provided,  That  nothing  in  this  sec- 

atl-«,0unn°tes     ti°n  snall  relieve  any  association  from  its  liability  to  redeem 

its  circulating  notes  at  its  own  counter,  at  par,  in  lawful 

and  to  receive       money,  on  demand :   And  provided  further.  That  every  as- 

othe"°nltionainy    sociation  formed  or  existing  under  the  provisions  of  this  act 

bank  inpayment  shall  take  and  receive  at  par,12  for  any  debt  or  liability  to 

said  association,  any  arid  all  notes  or  bills  issued  by  any 

association  existing  under  and  by  virtue  of  this  act. 

DIVIDENDS. 
Dividends,  when        SEC.  33.  And  be  it  further  enacted.  That  the  directors  of 

and  ho) 
elarod. 


any  association  may,  semi-annually,  each  year,  declare  a 


12.  The  act  of  July  12,  1870,  chapter  252,  section  5,  exempts  gold  banks  in 
San  Francisco  from  any  obligation  to  redeem  their  gold  notes  at  par  in  the 
city  of  New  York,  and  also  exempts-  all  gold  banks  from  the  provision  requir 
ing  national  banks  to  receive  in  payment  of  debts  the  currency  notes  of  every 
other  bank  at  par. 


LIMITATIONS  AND  RESTRICTIONS.  123 

dividend  of  so  much  of  the  net  profits  of  the  association 

as  they  shall  judge  expedient;  but  each  association  shall,   Restriction. 

before  the  declaration  of  a  dividend,  carry  one-tenth  part 

of  its  net  profits  of  the  preceding  half  year  to  its  surplus 

fund,  until  the  same  shall  amount  to  twenty  per  centum  of 

its  capital  stock. 1 3 

SEC.  34.  [Relating  to  reports,  superseded  by  act  of  March 
3,  1869,  chapter  130.] 

PURCHASING  AND  LOANING  ON  SHARES. 

SEC.  35.   And  be  it  further  enacted,  That  no  association  Banks  not  to  loan 
shall  make  any  loan  or  discount  on  the  security  of  the  shares  £oid  the?*ownr 
of  its  own  capital  stock,14  nor  be  the  purchaser  or  holder  shares,  except  m 
of  any  such  shares,  unless  such  security  or  purchase  shall 
be  necessary  to  prevent  loss  upon  a  debt  previously  con 
tracted  in  good  faith ;  and  stock  so  purchased  or  acquired 
shall,  within  six  months  from  the  time  of  its  purchase,  be 
sold  or  disposed  of  at  public  or  private  sale,  in  default  of 
which  a  receiver  may  be  appointed  to  close  up  the  business 
of  the  association,  according  to  the  provisions  of  this  act. 

LIMITATIONS  AND  RESTRICTIONS. 

SEC.  36.  And  be  it  further  enacted.  That  no  association  Limitation  of  m- 
shall  at  any  time  be  indebted,  or  in  any  way  liable,  to  an  debtedness  aT d 

exceptions. 

amount  exceeding  the  amount  of  its  capital  stock  at  such 
time  actually  paid  in  and  remaining  undiminished  by  losses 
or  otherwise,  except  on  the  following  accounts,  that  is  to 
say — 

First.   On  account  of  its  notes  of  circulation. 

Second.  On  account  of  moneys  deposited  with,  or  collected 
by,  such  association. 

Third.  On  account  of  bills  of  exchange  or  drafts  drawn 
against  money  actually  on  deposit  to  the  credit  of  such  asso 
ciation  or  due  thereto. 

13.  There  are  further  restrictions  in  section  38,  on  making  dividends,  that 
none  shall  be  made  to  a  greater  amount  than  the  net  profits  on  hand,  and 
none  whatever  if  the  losses  equal  or  exceed  the  profits. 

14.  The  deposit  of  funds  of  a  bank  with  bankers  is  a  loan  within  the 
meaning  of  this  section,  and  cannot  be  secured  by  a  pledge  of  the  shares  of 
the  bank.     (Bank  v.Lanier,  11  Wallace,  369.) 


124 


BANKING  LAWS. 


Notes  lot  to  be 
pledged  nor  used 
to  increase  capi 
tal. 


Withdrawal  of 
capital  forbidden. 


Dividends  lim 
ited  when  losses 
occur  by  bad 
debts. 


What  are  bad 
debts. 


Notes  not  to  be 
paid  out,  except 
those  of  solvent 
banks,  redeem 
able  at  par. 


Fourth.  On  account  of  liabilities  to  its  stockholders  for 
dividends  and  reserved  profits. 

SEC.  37.  And  be  it  further  enacted,  That  no  association 
shall,  either  directly  or  indirectly,  pledge  or  hypothecate 
any  of  its  notes  of  circulation,  for  the  purpose  of  procur 
ing  money  to  he  paid  in  on  its  capital  stock,  or  to  he 
used  in  its  banking  operations,  or  otherwise ;  nor  shall  any 
association  use  its  circulating  notes,  or  any  part  thereof, 
in  any  manner  or  form,  to  create  or  increase  its  capital 
stock. 

SEC.  38.  And  be  it  further  enacted,  That  no  association, 
or  any  member  thereof,  shall,  during  the  time  it  shall  con 
tinue  its  banking  operations,  withdraw,  or  permit  to  be 
withdrawn,  either  in  form  of  dividends  or  otherwise,  any 
portion  of  its  capital. 

And  if  losses  shall  at  any  time  have  been  sustained  by 
any  such  association  equal  to  or  exceeding  its  undivided 
profits  then  on  hand,  no  dividend  shall  be  made;  and  no 
dividend  shall  ever  be  made  by  any  association,  while  it 
shall  continue  its  banking  operations,  to  an  amount  greater 
than  its  net  profits  then  on  hand,  deducting  therefrom  its 
losses  and  bad  debts. 

And  all  debts  due  to  any  association,  on  which  interest 
is  past  due  and  unpaid  for  a  period  of  six  months,  unless 
the  same  shall  be  well  secured,  and  shall  be  in  process  of 
collection,  shall  be  considered  bad  debts  within  the  mean 
ing  of  this  act:  Provided,  That  nothing  in  this  section 
shall  prevent  the  reduction  of  the  capital  stock  of  the  asso 
ciation  under  the  thirteenth  section  of  this  act. 

SEC.  39.  And  be  it  further  enacted,  That  no  association 
shall  at  any  time  pay  out  on  loans  or  discounts,  or  in  pur 
chasing  drafts  or  bills  of  exchange,  or  in  payment  of  de 
posits,  or  in  any  other  mode  pay  or  put  in  circulation  the 
notes  of  any  bank  or  banking  association  which  shall  not, 
at  any  such  time,  be  receivable,  at  par,  on  deposit  and  in 
payment  of  debts  by  the  association  so  paying  out  or  circu 
lating  such  notes;  nor  shall  it  knowingly  pay  out  or  put 
in  circulation  any  Botes  issued  by  any  bank  or  banking 
association  which  at  the  time  of  such  paying  out  or  putting 


PLATES  AND  DIES— TAXES.  125 

in  circulation  is  not  redeeming  its  circulating  notes  in  law 
ful  money  of  the  United  States. 

LIST  OF  STOCKHOLDERS. 

SEC.  40.  And  be  it  further  enacted,  That  the  president  and  Listofstockhoi.-i- 
cashier  of  every  such  association  shall  cause  to  he  kept  at  aiTtimesami^nt 
all  times  a  full  and  correct  list  of  the  names  and  residences  to  comptroller 
of  all  the  shareholders  in  the  association,  and  the  number 
of  shares  held  by  each,  in  the  office  where  its  business  is 
transacted ;  and  such  list  shall  be  subject  to  the  inspection 
of  all  the  shareholders  and  creditors  of  the  association,  and 
the  officers  authorized  to  assess  taxes  under  State  authority, 
during  business  hours  of  each  day  in  which  business  may 
be  legally  transacted ;  and  a  copy  of  such  list,  on  the  first 
Monday  of  July  in  each  year,  verified  by  the  oath  of  such 
president  or  cashier,  shall  be  transmitted  to  the  Comptroller 
of  the  Currency. 

PLATES  AND  DIES — TAXES. 

SEC.  41.  And  be  it  further  enacted.,  That  the  plates  and  pintes  and  -uos, 
special  dies  to  be  procured  by  the  Comptroller  of  the  Cur-  h 
rency  for  the  printing  of  such  circulating  notes  shall  remain 
under  his  control  and  direction,  and  the  expenses  necessa 
rily  incurred  in  executing  the  provisions  of  this  act  respect 
ing  the  procuring  of  such  notes.,  and  all  other  expenses  of 
the  bureau,  shall  be  paid  out  of  the  proceeds  of  the  taxes  or 
duties  now  or  hereafter  to  be  assessed  on  the  circulation, 
and  collected  from  associations  organized  under  this  act. 

And  in  lieu  of  all  existing  taxes,  every  association  shall   Duties  or  taxes  to 
pay  to  the  Treasurer  of  the  United  States,  in  the  months  of  be  paid  by  hflnks- 
January  and  July,  a  duty  1 5  of  one-half  of  one  per  centum 
each  half  year  from  and  after  the  first  day  of  January, 
eighteen  hundred  and  sixty-four,  upon  the  average  amount 
of  its  notes  in  circulation,  and  a  duty  of  one-quarter  of  one 
per  centum  each  half  year  upon  the  average  amount  of  its 
deposits,  and  a  duty  of  one-quarter  of  one  per  centum  each 
half  year,  as  aforesaid,  on  the  average  amount  of  its  capital 

15.  The  regulations  and  instructions  of  the  Treasury  Department  in  rela 
tion  to  the  payment  of  taxes  and  duties  by  banks  may  be  found  at  the  end  of 
the  banking  laws  printed  in  this  volume. 


126 


BANKING  LAWS. 


3e  mi-annual  re 
turns. 


Penalty  for  de 
fault. 


Taxes  on  shares 
may  be  imposed 
by  State  author 
ity. 


stock  beyond  the  amount  invested  in  United  States  bonds ; 
and  in  case  of  default  in  the  payment  thereof  by  any  asso 
ciation,  the  duties  aforesaid  may  be  collected  in  the  manner 
provided  for  the  collection  of  United  States  duties  of  other 
corporations,  or  the  Treasurer  may  reserve  the  amount  of 
said  duties  out  of  the  interest,  as  it  may  become  due  on  the 
bonds  deposited  with  him  by  such  defaulting  association. 

And  it  shall  be  the  duty  of  each  association,  within  ten 
days  from  the  first  days  of  January  and  July  of  each  year, 
to  make  a  return,  under  the  oath  of  its  president  or  cashier, 
to  the  Treasurer  of  the  United  States,  in  such  form  as  he 
may  prescribe,  of  the  average  amount  of  its  notes  in  circu 
lation,  and  of  the  average  amount  of  its  deposits,  and  of 
the  average  amount  of  its  capital  stock,  beyond  the  amount 
invested  in  United  States  bonds,  for  the  six  months  next 
preceding  said  first  clays  of  January  and  July  as  aforesaid, 
and  in  default  of  such  return,  and  for  each  default  thereof, 
each  defaulting  association  shall  forfeit  and  pay  to  the 
United  States  the  sum  of  two  hundred  dollars,  to  be  col 
lected  either  out  of  the  interest  as  it  may  become  due  such 
association  on  the  bonds  deposited  with  the  Treasurer,  or, 
at  his  option,  in  the  manner  in  which  penalties  are  to  be 
collected  of  other  corporations  under  the  laws  of  the  United 
States ;  and  in  case  of  such  default  the  amount  of  the  duties 
to  be  paid  by  such  association  shall  be  assessed  upon  the 
amount  of  notes  delivered  to  such  association  by  the  Comp 
troller  of  the  Currency,  and  upon  the  highest  amount  of  its 
deposits  and  capital  stock,  to  be  ascertained  in  such  other 
manner  as  the  Treasurer  may  deem  best: 

Provided,  That  nothing  in  this  act  shall  be  construed  to 
prevent  all  the  shares  in  any  of  the  said  associations,  held 
by  any  person  or  body  corporate,  from  being  included  in  the 
valuation  of  the  personal  property  of  such  person  or  corpo 
ration  in  the  assessment  of  taxes  imposed  by  or  under  State 
authority16  at  the  place  where  such  bank  is  located,  and 


16.  By  act  of  Feb'y  10,  1868,  chapter  7,  the  word  "place,"  as  used  in 
this  section,  is  defined  to  mean  the  State  within  which  the  hank  is  located, 
and  further  provisions  are  made  authorizing  States  to  tax  national  hanks. 

Bank  shares  may  constitutionally  be  taxed  under  State  authority,  with 


LIQUIDATION  AND  CLOSING.  127 

not  elsewhere,  but  not  at  a  greater  rate  than  is  assessed 
upon  other  moneyed  capital  in  the  hands  of  individual  citi 
zens  of  such  State :  Provided  further ,  That  the  tax  so  im 
posed  under  the  laws  of  any  State  upon  the  shares  of  any 
of  the  associations  authorized  by  this  act  shall  not  exceed 
the  rate  imposed  upon  the  shares  in  any  of  the  banks  or 
ganized  under  authority  of  the  State  where  such  association 
is  located:  Provided,  also,  That  nothing  in  this  act  shall  And  on  real  es- 
exempt  the  real  estate  of  associations  from  either  State, 
county,  or  municipal  taxes  to  the  same  extent,  according 
to  its  value,  as  other  real  estate  is  taxed. 


LIQUIDATION  AND  CLOSING. 

SEC.  42.  And  be  it  further  enacted,  That  any  association  Banks  may  vol 
untarily  go  i  ' 

liquidation. 


may  go  into  liquidation  and  be  closed  by  the  vote  of  its 


shareholders  owning  two-thirds  of  its  stock.  And  when 
ever  such  vote  shall  be  taken,  it  shall  be  the  duty  of  the 

out  regard  to  the  fact  that  part  or  the  whole  of  the  capital  of  the  hank  is 
invested  in  obligations  of  the  United  States  exempt  by  law  from  taxation; 
but  an  act  of  the  State  of  New  York  authorizing  taxation  of  national  bank 
shares,  which  did  not  contain  a  limitation  that  the  tax  so  authorized  should 
not  exceed  the  rate  imposed  upon  the  shares  of  any  of  the  banks  organized 
under  authority  of  the  State,  which  latter  banks  were  taxed  on  their  capital 
but  not  on  their  share*,  was  held  to  be  void.  ( Van  Allen  v.  The  Assessors,  3 
Wallace,  573;  People  v.  The  Commissioners,  4  Wallace,  244;  Bradley  v.  The 
People,  4  Wallace,  459.) 

A  State  law,  requiring  national  banks  to  pay  the  taxes  rightfully  assessed 
upon  the  shares  of  its  stock,  is  valid.  (National  Bank  v.  Commonwealth,  9 
Wallace,  353.) 

The  State  of  Missouri  had  two  banks  of  issue,  which  it  had  by  con 
tract  exempted  from  taxation  beyond  a  limited  amount.  It  had  many  other 
banks  not  of  issue,  which  were  by  law  taxed  at  a  greater  amount.  Held,  that 
the  shares  of  national  banks  in  that  State  might  be  taxed  at  as  high  a  rate 
as  those  of  the  State  banks  whose  taxation  was  not  limited.  (Lionberger  v. 
Rouse,  9  Wallace,  468.) 

There  is  much  conflict  of  opinion  in  the  numerous  decisions  of  State  courts 
in  relation  to  the  taxation  of  national  banks,  which  it  would  be  of  little 
practical  advantage  to  undertake  to  specify  here,  as  those  opinions  are  bind 
ing  only  in  the  States  where  given,  and  not  there  even  when  contrary  to  the 
decisions  of  the  Supreme  Court  of  the  United  States. 

They  may  be  found  in  53  Maine,  594;  55  Maine,  456;  56  Maine,  274,  310; 
09  Mats.,  141;  14  Allen,  359;  11  Minn.,  500;  44  Barb  our,  148;  32  Conn.,  173; 
16  Ohio  State  JR.,  614;  54  Pcnn.  State  R.,  139;  23  Wis.,  655;  27  Iowa,  350; 
32  New  Jersey  Law  R.,  273.  (See  also  2  Black,  S.  C.  U.  3.,  620.) 


128  BANKING  LAWS. 

board  of  directors  to  cause  notice  of  this  fact  to  be  certified, 
under  the  seal  of  the  association,  by  its  president  or  cashier, 
to  the  Comptroller  of  the  Currency,  and  publication  thereof 
to  be  made  for  a  period  of  two  months  in  a  newspaper  pub 
lished  in  the  city  of  New  York,  and  also  in  a  newspaper 
published  in  a  city  or  town  in  which  the  association  is 
located,  and  if  no  newspaper  be  there  published,  then  in  the 
newspaper  published  nearest  thereto,  that  said  association 
is  closing  up  its  affairs,  and  notifying  the  holders  of  its 
notes  and  other  creditors  to  present  the  notes  and  other 
claims  against  the  association  for  payment. 

And  after  one  And  at  any  time  after  the  expiration  of  one  year  from  the 

year,  on  payment  time  of  the  publication  of  su ch  notice  as  aforesaid,  the  said 

01  outstanding  ' 

notes,  may  with-    association  may  pay  over  to  the  Treasurer  of  the   United 
draw  its  bonds.     States  the  amount  of  its  outstanding  notes  in  the  lawful 

money  of  the  United  States,  and  take  up  the  bonds  which 
said  association  has  on  deposit  with  the  Treasurer  for  the 
security  of  its  circulating  notes ; 1  7  which  bonds  shall  be  as 
signed  to  the  bank  in  the  manner  specified  in  the  nineteenth 
section  of  this  act,  and  from  that  time  the  outstanding  notes 
of  said  association  shall  be  redeemed  at  the  Treasury  of  the 
United  States,  and  the  said  association  and  the  shareholders 
•  thereof  shall  be  discharged  from  all  liabilities  therefor. 
Redemption  ac-         SEC.  43.  And  le  it  further  enacted,  That  the  Treasurer, 

count  to  be  kept    on  receivinp  from  an  association  lawful  money  for  the  pay- 
by  Treasurer;  J  L    J 
notes  to  be  re-       nient  and  redemption  of  its  outstanding  notes,  as  provided 

burned* *  ^'or  *n  ^ie  Precec^ing  section  of  this  act,  shall  execute  dupli 

cate  receipts  therefor,  one  to  the  association  and  the  other 
to  the  Comptroller  of  the  Currency,  stating  the  amount 
received  by  him,  and  the  purpose  for  which  it  has  been  re 
ceived,  which  amount  shall  be  paid  into  the  Treasury  of  the 
United  States,  and  placed  to  the  credit  of  such  association 
upon  redemption  account.  And  it  shall  be  the  duty  of  the 
Treasurer,  whenever  he  shall  redeem  any  of  the  notes  of 
said  association,  to  cause  the  same  to  be  mutilated,  and 
charged  to  the  redemption  account  of  said  association  ;  and 

17.  Banks  are  required  to  do  this  within  six  months  after  voting  to  go  into 
liquidation.  (See  page  157,  act,  of  July  14, 1870.)  Bonds  deposited  to  secure 
circulation  cannot  be  retained  for  other  claims  of  the  United  States.4  (Opin 
ions  of  Attorneys  General,  vol.  12,  p.  549.) 


CONVERSION  OF  STATE  BANKS.  129 

all  notes  so  redeemed  by  the  Treasurer  shall,  every  three 
months,  he  certified  to  and  burned  in  the  manner  prescribed 
in  the  twenty-fourth  section  of  this  act. 


CONVERSION  OF  STATE  BANKS. 


SEC.  44.  And  be  it  further  enacted,  That  any  bank  incor-  state  banks,  how 

they  may  becorn 
national  bnnkn. 


porated  by  special  law,  or  any  banking  institution  organ-  i 


ized  under  a  general  law  of  any  State,1  8  may,  by  authority 
of  this  act,  become  a  national  association  under  its  provisions, 
by  the  name  prescribed  in  its  organization  certificate ;  and 
in  such  case  the  articles  of  association  and  the  organization 
certificate  required  by  this  act  may  be  executed  by  a  major 
ity  of  the  directors  of  the  bank  or  banking  institution ; 
and  said  certificate  shall  declare  that  the  owners  of  two- 
thirds  of  the  capital  stock  have  authorized  the  directors  to 
make  such  certificate  and  to  change  and  convert  the  said 
bank  or  banking  institution  into  a  national  association  un 
der  this  act. 

And  a  majority  of  the  directors,  after  executing  said 
articles  of  association  and  organization  certificate,  shall 
have  power  to  execute  all  other  papers,  and  to  do  whatever 
may  be  required  to  make  its  organization  perfect  and  com 
plete  as  a  national  association. 

The  shares  of  any  such  bank  may  continue  to  be  for  the  shares  of  stock 
same  amount  each  as  they  were  before  said  conversion,  and         ren 

18.  A  national  bank  organized  from  a  State  bank,  and  receiving  its  assets, 
is  liable  for  its  debts.  (Thorp  v.  Wegefarth,  56  Perm.,  82.) 

The  right  of  action  to  recover  damages  for  the  fraudulent  misapplica 
tion  of  the  property  of  a  State  bank  by  one  of  its  officers  passes  as  assets  to 
the  national  bank  into  which  it  is  converted  under  this  act.  (Grocers'  Na 
tional  Bank  of  the  City  of  New  York  v.  Clarke,  48  .Bar hour,  26.) 

For  minimum  amount  of  capital  allowed  see  section  7,  page  104. 

The  act  of  March  3,  1865,  (chapter  78,  section  7,)  authorizes  State  banks 
having  branches  to  be  converted  into  national  banks,  and  to  keep  their 
branches  in  operation. 

That  part  of  section  7  above  referred  to  which  allowed  State  banks  for 
a  limited  time  to  become  national  associations,  in  preference  to  new  organi 
zations,  is  omitted,  because  the  time  limited  has  expired. 

National  banks  cannot  become  State  banks  and  cease  to  be  national, 
without  authority  of  Congress  therefor,  which  does  not  now  exist.  (Official 
Opinion  of  Attorney  General  Hoar,  1869.) 

9 


130 


BANKING  LAWS. 


Directors. 


May  continue  to 
hold  shares  in 
other  banks. 


When  may  com 
mence  business. 


Minimum  capi 
tal. 


the  directors  aforesaid  may  be  the  directors  of  the  associa 
tion  until  others  are  elected  or  appointed  in  accordance  with 
the  provisions  of  this  act ; 

And  any  State  bank  which  is  a  stockholder  in  any  other 
bank,  by  authority  of  State  laws,  may  continue  to  hold  its 
stock,  although  either  bank,  or  both,  may  be  organized 
under  and  have  accepted  the  provisions  of  this  act. 

When  the  Comptroller  shall  give  to  such  association  a 
certificate,  under  his  hand  and  official  seal,  that  the  pro 
visions  of  this  act  have  been  complied  with,  and  that  it  is 
authorized  to  commence  the  business  of  banking  under  it, 
the  association  shall  have  the  same  powers  and  privileges, 
and  shall  be  subject  to  the  same  duties,  responsibilities,  and 
rules,  in  all  respects,  as  are  prescribed  in  this  act  for  other 
associations  organized  under  it,  and  shall  be  held  and  re 
garded  as  an  association  under  this  act :  Provided,  hotuever, 
That  no  such  association  shall  have  a  less  capital  than  the 
amount  prescribed  for  banking  associations  under  this  act'. 


DESIGNATED  DEPOSITARIES. 

v.  hen  may  be  de-  SBC.  45.  And  be  it  further  enacted ,  That  all  associations 
under  this  act,  when  designated  for  that  purpose  by  the 
Secretary  of  the  Treasury,  shall  be  depositaries  of  public 
money,1  9  except  receipts  from  customs,  under  such  regula 
tions  as  may  be  prescribed  by  the  Secretary ;  and  they  may 
also  be  employed  as  financial  agents  of  the  Government ; 
and  they  shall  perform  all  such  reasonable  duties,  as  deposi 
taries  of  public  moneys  and  financial  agents  of  the  Govern 
ment,  as  may  be  required  of  them. 

And  the  Secretary  of  the  Treasury  shall  require  of  the 
associations  thus  designated  satisfactory  security,  by  the 
deposit  of  United  States  bonds  and  otherwise,  for  the  safe 
keeping  and  prompt  payment  of  the  public  money  deposited 

19.  Banks  designated  as  depositaries,  under  the  provisions  of  this  act,  are 
public  depositaries  within  the  meaning  of  the  act  of  August  6,  1846,  (9  Stat. 
at  Large,  59,)  as  amended  by  the  act  of  March  3, 1857,  (11  Stat.  at  Large,  249,) 
requiring  every  disbursing  officer  or  agent  of  the  United  States,  having  any 
money  of  the  Government,  to  deposit  the  same  with  the  United  States  Treas 
nrcr,  or  with  some  one  of  the  Assistant  Treasurers  or  public  depos1  '•*•  •«<. i 
(Opinions. of  Attorneys  General,  vol.  II,  page  29.) 


Security  to  be 
given. 


FAILURE  TO  REDEEM  NOTES.  131 

with  them,  and  for  the  faithful  performance  of  their  duties 

as  financial  agents  of  the  Government:     Provided,  That  TO  receive  at  par 

i  •   i       i      i-i    i  -iii  in-  i     i  nil  national  cur- 

eveiy  association  which  shall  be  selected  and  designated  as  rencybms. 
receiver  or  depositary  of  the  public  money  shall  take  and 
receive  at  par  all  of  the  national  currency  bills,  by  what 
ever  association   issued,   which  have   been   paid   into  the 
Government  for  internal  revenue,  or  for  loans  or  stocks. 

PROCEEDINGS  ON  FAILURE  TO  REDEEM  NOTES. 

SEC.  46.  And  be  it  further  enacted,  That  if  any  such  asso-  Notes,  when  not 
ciation  shall  at  any  time  fail  to  redeem,  in  the  lawful  money  mamnSyljanks0 
of  the  United  States,  any  of  its  circulating  notes,  when  pay-  issuing  them,  to 
ment  thereof  shall  be  lawfully  demanded,  during  the  usual 
hours  of  business,  at  the  office  of  such  association,  or  at  its 
place  of  redemption  aforesaid,  the  holder  may  cause  the 
same  to  be  protested,  in  one  package,  by  a  notary  public, 
unless  the  president  or  cashier  of  the  association  whose 
notes  are  presented  for  payment,  or  the  president  or  cashier 
of  the  association  at  the  place  at  which  they  are  redeemable, 
shall  offer  to  waive  demand  and  notice  of  the  protest,  and 
shall,  in  pursuance  of  such  offer,  make,  sign,  and  deliver 
to  the  party  making  such  demand  an  admission  in  writing, 
stating  the  time  of  the  demand,  the  amount  demanded,  and 
the  fact  of  the  non-payment  thereof;  and  such  notary  public, 
on  making  such  protest,  or  upon  receiving  such  admission, 
shall  forthwith  forward  such  admission  or  notice  of  protest 
to  the  Comptroller  of  the  Currency,  retaining  a  copy  thereof. 

And  after  such  default,  on  examination  of  the  facts  by  comptroller  to 
the  Comptroller,  and  notice  by  him  to  the  association,  it  examine  into  the 

7  J  facts  and  notify 

shall  not  be  lawful  for  the  association  suffering  the  same  to  banks,  &c. 
pay  out  any  of  its  notes,  discount  any  notes   or  bills,  or 
otherwise  prosecute  the  business  of  banking,  except  to  re 
ceive  and  safely  keep  money  belonging  to  it,  and  to  deliver 
special  deposits : 

Provided,  That  if  satisfactory  proof  be  produced  to  such  Restriction  on 
notary  public  that  the  payment  of  any  such  notes  is  re-  |J£^J**n< 
strained  by  order  of  any  court  of  competent  jurisdiction, 
such  notary  public  shall  not  protest  the  same;  and  when 
the  holder  of  such  notes  shall  cause  more  than  one  note  or 


132  BANKING  LAWS. 

package  to  be  protested  on  the  same  day,  lie  shaL  not  receive 
pay  for  more  than  one  protest. 

comptroller's  SEC.  47.  And  be  it  further  enacted,  That  on  receiving  no- 

no  ticenofeprotesf  t^ce  ^iat  an>T  suc^  association  has  failed  to  redeem  any  of 
of  not*?.  its  circulating  notes,  as  specified  in  the  next  preceding  sec 

tion,  the  Comptroller  of  the  Currency,  with  the  concurrence 
of  the  Secretary  of  the  Treasury,  may  appoint  a  special 
agent  (of  whose  appointment  immediate  notice  shall  he 
given  to  such  association,)  who  shall  immediately  proceed 
to  ascertain  whether  such  association  has  refused  to  pay  its 
circulating  notes  in  the  lawful  money  of  the  United  States, 
when  demanded  as  aforesaid,  and  report  to  the  Comptroller 
the  facts  so  ascertained;  and  if,  from  such  protest  or  the 
report  so  made,  the  Comptroller  shall  he  satisfied  that  such 
association  has  refused  to  pay  its  circulating  notes  as  afore- 
Forfeiturecf  said  and  is  in  default,  he  shall,  within  thirty  days  after  he 
shall  have  received  notice  of  such  failure,  declare  the  United 
States  bonds  and  securities  pledged  by  such  association  for 
feited  to  the  United  States,  and  the  same  shall  thereupon 
be  forfeited  accordingly. 

And  thereupon  the  Comptroller  shall  immediately  give 


paiied\n°andpirid  notice  ^n  suc^  manner  as  the  Secretary  of  the  Treasury 
at  .u.  s.  Treasury,  shall,  by  general  rules  or  otherwise,  direct,  to  the  holders 
of  the  circulating  notes  of  such  association  to  present  them 
for  payment  at  the  Treasury  of  the  United  States,  and  the 
same  shall  be  paid  as  presented  in  lawful  money  of  the 
United  States;  whereupon  said  Comptroller  may,  in  his 
discretion,  cancel  an  amount  of  bonds  pledged  by  such 
association  equal  at  current  market  rates,  not  exceeding 
par,  to  the  notes  paid. 

Disposal  of  notes  And  it  shall  be  lawful  for  the  Secretary  of  the  Treasury, 
from  time  to  time,  to  make  such  regulations  respecting  the 
disposition  to  be  made  of  such  circulating  notes  after  pre 
sentation  thereof  for  payment  as  aforesaid,  and  respecting 
the  perpetuation  of  the  evidence  of  the  payment  thereof,  as 
may  seem  to  him  proper  ;  but  all  such  notes,  on  being  paid, 
shall  be  canceled. 

And  for  any  deficiency  in  the   proceeds  of  the  bonds 
pledged  by  such  association,  when  disposed  of  as  herein- 


FAILURE  TO  REDEEM  NOTES.  133 

after  specified,  to  reimburse  to  the  United  States  the  amount  —united  states 
so  expended  in  paying  the  circulating  notes  of  such  associa- 


tion,  the  United  States  shall  have  a  first  and  paramount  amount  expend- 

.  ..  ed  in  redemption 

hen  upon  all  the  assets  of  such  association;  and  such  defi-  Of  notes. 
ciency  shall  be  made  good  out  of  such  assets  in  preference  (See  note  u,  page 
to  any  arid  all  other  claims  whatsoever,  except  the  neces-  135'^ 
sary  costs  and  expenses  of  administering  the  same. 

SEC.  48.  And  be  it  further  enacted,  That  whenever  the  Bonds  to  be  sold 
Comptroller  shall  become  satisfied,  as  in  the  last  preceding  %™S^*?tn' 
section  specified,  that  any  association  has  refused  to  pay  its  notes. 
circulating  notes  as  therein  mentioned,  he  may,  instead  of 
canceling  the  United  States  bonds  pledged  by  such  associa 
tion,  as  provided  in  the  next  preceding  section,  cause  so 
much  of  them  as  may  be  necessary  to  redeem  the  outstand 
ing  circulating  notes  of  such  association  to  be  sold  at  public 
auction  in  the  city  of  New  York,  after  giving  thirty  days' 
notice  of  such  sale  to  such  association. 

SEC.  49.  And  be  it  further  enacted,  That  the  Comptroller  May  be  sold  at 
of  the  Currency  may,  if  he  shall  be  of  opinion  that  the  in-   £0^0^*" 
terests  of  the  United  States  will  be  best  promoted  thereby,   thinks  best. 
sell  at  private  sale  any  of  the  bonds  pledged  by  such  asso 
ciation,  and  receive  therefor  either  money  or  the  circulating 
notes  of  such  failing  association:  Provided,  That  no  such 
bonds  shall  be  sold  by  private  sale  for  less  than  par,  nor 
less  than  the  market  value  thereof  at  the  time  of  sale: 

And  provided  further,  That  no  sales  of  any  such  bonds,   saiesnotcom- 
either  public  or  private,  shall  be  complete  until  the  transfer  ^f^*'1  tmns" 
thereof  shall  have  been  made  with  the  formalities  prescribed 
in  this  act. 

SEC.  50.  And  be  it  further  enacted,  That  on  becoming  Receiver,  when 
satisfied,  as  specified  in  this  act,  that  any  association  has 
refused  to  pay  its  circulating  notes  as  therein  mentioned,   ties. 
and  is  in  default,  the   Comptroller  of  the  Currency  may 
forthwith  appoint  a  receiver,  and  require  of  him  such  bond 
and  security  as  he  shall  deem  proper,  who,  under  the  direc 
tion  of  the  Comptroller,  shall  take  possession  of  the  books, 
records,  and  assets  2°.of  every  description  of  such  associa- 

20.   As  to  the  power  of  a  receiver  over  the  residue  of  bonds  deposited 
to  secure  circulation,  after  the  payment  of  all  notes,  see  the  opinions  of 


134  BANKING  LAWS. 

lion,  collect  all  debts,  dues,  and  claims  2l  belonging  to  such 
association,  and,  upon  the  order  of  a  court  of  record  of  com 
petent  jurisdiction,*  2  may  sell  or  compound  all  bad  or  doubt 
ful  debts,  and,  on  a  like  order,  sell  all  the  real  and  personal 
property  of  such  association,  on  such  terms  as  the  court 
shall  direct ;  and  may,  if  necessary  to  pay  the  debts  of  such 
association,  enforce  the  individual  liability  of  the  stock 
holders  provided  for  by  the  twelfth  section  of  this  act ;  2 3 
and  such  receiver  shall  pay  over  all  money  so  made  to  the 
Treasurer  of  the  United  States,  subject  to  the  order  of  the 

a  divided  court  in  Van  Antwerp  v.  Hulburd  et  al.,  (8  Blatchford  C.  0.  R., 
282.) 

The  right  to  appeal  from  a  judgment  in  a  suit  against  a  State  bank  con 
verted  into  a  national  bank  which  fails,  passes  to  the  receiver.  (Claflin  v. 
The  Farmers  and  Citizens'  Bank  of  Long  Island,  54  Harbour,  228.) 

21.  The  word  "debts"  in  this  section  includes  all  legal  liabilities.     The 
assets  in  the  hands  of  the  receiver  are  to  be  divided  and  appropriated  to  the 
payment  of  all  legal  liabilities,  whether  such  liabilities  are  debts,  technically 
so  called,  or  result  from  the  non-feasance  or  mal-feasance  of  the  association  in 
respect  to  its  binding  obligations  and  duties.    (Turner  v.  First  National  Bank 
of  Keokuk,  26  Iowa,,  562.) 

A  receiver  of  a  national  bank  is  an  officer  of  the  United  States,  and  may 
bring  suits  in  the  district  courts  of  the  United  States,  under  the  provis 
ions  of  the  act  of  March  3,  1815,  (sec.  4,)  to  collect  claims  due  to  the  bank. 
His  appointment  by  the  Comptroller  of  the  Currency,  with  the  concurrence 
of  the  Secretary  of  the  Treasury,  is  equivalent  to  an  appointment  by  the 
Secretary,  who  is  the  head  of  a  Department,  and  comes  within  the  provisions 
of  the  Constitution,  art.  II,  sec.  2,  sub.  2.  (Plait,  Receiver,  v.  Beach,  2  Bene 
dict's  District  Court  R.,  303.) 

After  a  bank  had  stopped  payment,  and  before  a  receiver  was  appointed, 
a  debtor  to  the  bank  purchased  and  took  an  assignment  of  the  claim  of  a 
depositor,  for  the  purpose  of  having  it  set  off  against  his  debt.  A  receiver 
was  afterwards  appointed,  and  the  set-off  was  disallowed  and  the  assignment 
held  to  be  void,  as  an  attempt  to  give  a  preference  prohibited  by  this  act. 
(Venango  National  Bank  v.  Taylor,  56  Penn.,  14.) 

22.  A  district  court  of  the  United  States  is  a  court  of  record  of  competes 
jurisdiction,  within  the  meaning  of  this  section,  to  make  an  order  authorizing 
a  receiver  to  compromise  doubtful  debts.     (Petition  of  Platt,  Receiver,  1  Bene 
dict's  District  Court  R.,  534.) 

23.  Action  on  the  part  of  the  Comptroller  of  the  Currency  is  indispensable, 
whenever  the  personal  liability  of  the  stockholders  is  sought  to  bo  enforced, 
and  must  precede  the  institution  of  suit  by  the  receiver,  who  is  the  statu 
tory  assignee,  and  the  proper  party  to  institute  all  suits.     Creditors  of  the 
bank  are  not  proper  parties  to  such  suits.     (Kennedy  v.   Gibson  et  al.,  8 
Wallace,  498.) 


FAILURE  TO  REDEEM  NOTES.  135 

Comptroller  of  the  Currency,  and  also  make  report  to  the 
Comptroller  of  the  Currency  of  all  his  acts  and  proceedings. 
The  Comptroller  shall  thereupon  cause  notice  to  be  given, 
by  advertisement  in  such  newspapers  as  he  may  direct,  for  comptroller  to 
three  consecutive  months,  calling  on  all  persons  who  may  claims-6  fC 
have  claims  against  such  association  to  present  the  same, 
and  to  make  legal  proof  thereof.     And  from  time  to  time 
the  Comptroller,  after  full  provision  shall  have  been  first 
made  for  refunding  to  the  United  States  any  such  deficiency 
in  redeeming  the  notes  of  such  association  as  is  mentioned 
in  this  act,  shall  make  a  ratable  24  dividend  of  the  money  —and  make  dm 
so  paid  over  to  him  by  such  receiver  on  all  such  claims  as  dends- 
may  have  been  proved  to  his  satisfaction  or  adjudicated  in 
a  court  of  competent  jurisdiction  ;  2  5  and  from  time  to  time, 
as  the  proceeds  of  the  assets  of  such  association  shall  be 
paid  over  to  him,  he  shall  make  further  dividends,  as  afore 
said,  on  all  claims  previously  proved  or  adjudicated;  and  Balance,  if  any, 
the  remainder  of  such  proceeds,  if  any,  shall  be  paid  over  shareholders. 
to  the  shareholders  of  such  association,  or  their  legal  repre 
sentatives,  in  proportion  to  the  stock  by  them  respectively 
held. 

Provided,  however,  That  if  such  association  against  which  Banks  denying 
proceedings  have  been  so  instituted,  on    account  of  any  refus^to^cT 
alleged  refusal  to  redeem  its  circulating  notes  as  aforesaid,   deem  notes  maj 
shall  deny  having  failed  to  do  so,  such  association  may,  at  1011  S' 

any  time  within  ten  days  after  such  association  shall  have 
been  notified  of  the  appointment  of  an  agent,  as  provided 
in  this  act,  apply  to  the  nearest  circuit,  or  district,  or  terri 
torial  court  of  the  United  States,  to  enjoin  further  proceed 
ings  in  the  premises;  and  such  court,  after  citing  the 

24.  The  United  States  have  no  right  to  priority  of  payment  of  debts  due  to 
the  Government  as  against  private  creditors  of  insolvent  banks,  except  to  be 
reimbursed  the  amount  expended  in  redeeming  the  circulating  notes  of  such 
banks,  according  to  the  provisions  of  section  47  of  this  act.     (Seepage  132.) 

The  act  of  March  3,  1797,  (sec.  5,)  giving  the  United  States  priority  over 
general  creditors  of  insolvent  debtors,  does  not  apply  to  national  banks.  (Offi 
cial  Opinion  of  Attorney  General  Aker man,  1870.) 

25.  The  Supreme  Court  of  Iowa  held  that  the  receiver  is  a  proper  party 
in  proceedings  for  the  adjudication  of  claims  against  a  national  bank.    (Tur 
ner  v.  First  National  Bank  of  Keokuk,  26  Iowa,  562.) 


136  BANKING  LAWS. 

Comptroller  of  the  Currency  to  show  cause  why  further 
proceedings  should  not  be  enjoined,  and  after  the  decision 
of  the  court  or  finding  of  a  jury  that  such  association  has 
not  refused  to  redeem  its  circulating  notes,  when  legally 
presented,  in  the  lawful  money  of  the  United  States,  shall 
make  an  order  enjoining  the  Comptroller,  and  any  receiver 
acting  under  his  direction,  from  all  further  proceedings  on 
account  of  such  alleged  refusal. 

of  pro-        SEC.  51.   And  be  it  further  enacted,  That  all  fees  for  pro- 
testing  the  notes  issued  by  any  such  banking  association 

p^d.  shall  be  paid  by  the  person  procuring  the  protest  to  be 

made,  and  such  banking  association  shall  be  liable  there 
for;  but  no  part  of  the  bonds  pledged  by  such  banking  as- 
ssciation,  as  aforesaid,  shall  be  applied  to  the  payment  of 
such  fees.  And  all  expenses  of  any  preliminary  or  other 
examinations  into  the  condition  of  any  association  shall  be 
paid  by  such  association ;  and  all  expenses  of  any  receiver 
ship  shall  be  paid  out  of  the  assets  of  such  association  before 
distribution  of  the  proceeds  thereof. 

Transfer  of  prop-       SEC.  52.  And  be  it  further  enacted,  That  all  transfer  of 

bfnksflnd^ther   the  notes;  bonds>  bills  of  exchange,  and  other  evidences  of 
acts  giving  pref-    debt  owing  to  any  association,  or  of  deposits  to  its  credit; 

crence,  void.  11  •  c  A.-  i  p 

all  assignments  or  mortgages,  sureties  on  real  estate,  or  of 
judgments  or  decrees  in  its  favor;  all  deposits  of  money, 
bullion,  or  other  valuable  thing  for  its  use,  or  for  the  use 
of  any  of  its  shareholders  or  creditors ;  and  all  payments 
of  money  to  either,  made  after  the  commission  of  an  act  of 
insolvency,  or  in  contemplation  thereof,  with  a  view  to  pre 
vent  the  application  of  its  assets  in  the  manner  prescribed 
by  this  act,  or  with  a  view  to  the  preference  of  one  creditor 
to  another,  except  in  payment  of  its  circulating  notes,  shall 
be  utterly  null  and  void. 

VIOLATION  OF  LAW  BY  DIRECTORS 

violation  of  law         SEC.  53.  And  be  it  further  enacted,  That  if  the  directors 
by  directors  to      Of  any  association  shall  knowingly  violate,  or  knowingly 

forfeit  right*,  &<•.  J  °  J  &  J 

f  bank,  and  di-  permit  any  of  the  officers,  agents,  or  servants  of  the  asso- 
ciation  to  violate,  any  of  the  provisions  of  this  act,  all  the 
rights,  privileges,  and  franchises  of  the  association  derived 


MISDEMEANORS  OF  OFFICERS.  13Y 

from  this  act  shall  be  thereby  forfeited.  Such  violation  shall, 
however,  be  determined  and  adjudged  by  a  proper  circuit, 
district,  or  territorial  court  of  the  United  States,  in  a  suit 
brought  for  that  purpose  by  the  Comptroller  of  the  Currency, 
in  his  own  name,  before  the  association  shall  be  declared  dis 
solved.  And  in  cases  of  such  violation,  every  director  who 
participated  in  or  assented  to  the  same  shall  be  held  liable 
in  his  personal  and  individual  capacity  for  all  damages 
which  the  association,  its  shareholders,  or  any  other  person, 
shall  have  sustained  in  consequence  of  such  violation. 

BANK  EXAMINERS. 

SEC.  54.  And  be  it  further  enacted,  That  the  Comptroller  Bank  examiners, 
of  the  Currency,  with  the  approbation  of  the  Secretary  of  ^ir  duty  an(i 
the  Treasury,  as  often  as  shall  be  deemed  necessary  or 
proper,  shall  appoint  a  suitable  person  or  persons  to  make 
an  examination  of  the  aifairs  of  every  banking  association, 
which  person  shall  not  be  a  director  or  other  officer  in  any 
association  whose  affairs  he  shall  be  appointed  to  examine, 
and  who  shall  have  power  to  make  a  thorough  examination 
into  all  the  affairs  of  the  association,  and,  in  doing  so,  to 
examine  any  of  the  officers  and  agents  thereof  on  oath  ;  and 
shall  make  a  full  and  detailed  report  of  the  condition  of  the 
association  to  the  Comptroller.  And  the  association  shall 
not  be  subject  to  any  other  visitorial  powers  than  such  as 
are  authorized  by  this  act,  except  such  as  are  vested  in  the 
several  courts  of  law  and  chancery.  And  every  person 
appointed  to  make  such  examination  shall  receive  for  his 
services  at  the  rate  of  five  dollars  for  each  day  by  him 
employed  in  such  examination,  and  two  dollars  for  every 
twenty-five  miles  he  shall  necessarily  travel  in  the  perform 
ance  of  his  duty,  which  shall  be  paid  by  the  association  by 
him  examined. 

MISDEMEANORS  OF  OFFICERS. 

SEC.  55.  And  be  it  further  enacted.  That  every  president,   Embezzlement, 
director,  cashier,  teller,  clerk,  or  agent  of  any  association,26 


-    funds,  and  othe 

26.  The  act  of  April  6,  1869,  chapter  11,  provides  for  the  punishment  of    misdemeanors, 
persons  aiding  or  abetting  officers  or  agents  in  doing  any  of  the  acts  enumer-    how  punished. 


138  BANKING  LAWS. 

who  shall  embezzle,  abstract,  or  willfully  misapply  any  of 
the  moneys,  funds,  or  credits  of  the  association,  or  shall, 
without  authority  from  the  directors,  issue  or  put  in  circu 
lation  any  of  the  notes  of  the  association,  or  shall,  without 
such  authority,  issue  or  put  forth  any  certificate  of  deposit, 
draw  any  order  or  bill  of  exchange,  make  any  acceptance, 
assign  any  note,  bond,  draft,  bill  of  exchange,  mortgage, 
judgment,  or  decree,  or  shall  make  any  false  entry  in  any 
book,  report,  or  statement  of  the  association,  with  intent, 
in  either  case,  to  injure  or  defraud  the  association  or  any 
other  company,  body  politic,  or  corporate,  or  any  individual 
person,  or  to  deceive  any  officer  of  the  association,  or  any 
agent  appointed  to  examine  the  affairs  of  any  such  associa 
tion,  shall  be  deemed  guilty  of  a  misdemeanor^  and  upon 
conviction  thereof  shall  be  punished  by  imprisonment  not 
less  than  five  nor  more  than  ten  years. 

SUITS  AGAINST  BANKS. 


certain  suits  to         SEC.  56.  And  be  it  further  enacted,  That  all  suits  and  pro 
be  conducted  by 
U.  S.  attorney,  &c. 


be  conducted  by    cee(:[ings  arising  out  Of  the  provisions  of  this  act,  in  which 


the  United  States  or  its  officers  or  agents  shall  be  parties, 
shall  be  conducted  by  the  district  attorneys  of  the  several 
districts,27  under  the  direction  and  supervision  of  the  Solic 
itor  of  the  Treasury. 

jurisdiction  of  SEC.  57.  And  be  it  further  enacted.  That  suits,  actions, 
an(^  Procee(liiigs  against28  any  association  under  this  act, 
may  be  had  in  any  circuit,  district,  or  territorial  court  of 
the  United  States  held  within  the  district  in  which  such 
association  may  be  established,29  or  in  any  State,  county, 

ated  in  this  section.  And  the  act  of  July  8,  1870,  chapter  226,  declares  to 
what  officers  and  what  banks  the  section  and  the  amendment  thereto  shall 
apply. 

27.  The  requirement  of  this  section  that  all  suits,  &c.,  under  this  act  shall 
be  conducted  by  the  district  attorneys  of  the  several  districts  is  merely  di 
rectory,  and  suits  may  be  conducted  by  private  counsel.     (Kennedy  v  Gib 
son  et  al.,  8  Wallace,  504.) 

28.  Under  this  section  suits  may  be  brought  by  as  well  as  against  national 
banks  in  the  courts  therein  mentioned.     The  omission  of  the  word  "by"  ia 
decided  to  be  accidental.     (Kennedy  v.  Gibson  et  al.,  8  Wallace,  506,) 

29.  The  Supreme  Judicial  Court  of  Massachusetts  has  decided  that  a  na- 


FORGERY.  COUNTERFEITING,  &o.  139 

or  municipal  court  in  the  county  or  city  in  which  said  asso 
ciation  is  located,  having  jurisdiction  in  similar  cases: 
Provided,  however, 30  That  all  proceedings  to  enjoin  the 
Comptroller  under  this  act  shall  he  had  in  a  circuit,  district, 
or  territorial  court  of  the  United  States,  held  in  the  district 
in  which  the  association  is  located. 

MUTILATION  OF  NOTES. 

SEC.  58.  And  be  it  further  enacted.  That  every  person  who  Mutilating  notes 
shall  mutilate,  cut,  deface,  disfigure,  or  perforate  with  holes,   dence^of  debts 
or  shall  unite  or  cement  together,  or  do  any  other  thing  to  punishable, 
any  hank  bill,  draft,  note,  or  other  evidence  of  debt,  issued 
by  any  such  association,  or  shall  cause  or  procure  the  same 
to  be  done,  with  intent  to  render  such  bank  bill,  draft,  note, 
or  other  evidence  of  debt  unfit  to  be  reissued  by  said  asso 
ciation,  shall,  upon  conviction,  forfeit  fifty  dollars  to  the 
association  who  shall  be  injured  thereby,  to  be  recovered  by 
action  in  any  court  having  jurisdiction. 

FORGERY,  CONTERFEITING,   PASSING   COUNTERFEIT    NOTES,  MAKING 
FALSE  PLATES,  AND  OTHER  OFFENSES. 

SEC.  59.  And  be  it  further  enacted,  That  if  any  person  Forgery, counter* 
shall  falsely  make,  forge,  or  counterfeit,  or  cause  or  procure  feitins notes» 

l  l         f  i  f  -±    i  -iv        i          • -i  passing  forged 

to  be  made,  forged,  or  counterfeited,  or  willingly  aid  or  notes,  &c. 
assist  in  falsely  making,  forging,  or  counterfeiting,  any 
note  in  imitation  of,  or  purporting  to  be  in  imitation  of, 
the  circulating  notes  issued  under  the  provisions  of  this  act, 
or  shall  pass,  utter,  or  publish,  or  attempt  to  pass,  utter, 
or  publish  any  false,  forged,  or  counterfeited  note,  purport 
ing  to  be  issued  by  any  association  doing  a  banking  business 
under  the  provisions  of  this  act,  knowing  the  same  to  be 

tional  bank  can  be  sued  in  a  State  court  only  in  the  county  or  city  in  which 
it  is  established.  The  Supreme  Court  of  New  York  has  decided  otherwise, 
and  holds  that  a  national  bank  may  be  sued  even  in  a  State  other  than  that 
in  which  it  is  located.  (Crocker  v.  Marine  National  Bank  of  New  York,  101 
Mass.,  24.0;  Cooke  v.  State  National  Bank  of  Boston,  50  Barbour,  339.) 

30.  This  proviso  does  not  give  to  United  States  circuit  courts  jurisdiction 
of  a  suit  in  equity  to  interfere  with  the  United  States  Treasurer  or  Comp 
troller  of  the  Currency  in  their  duties  respecting  bonds  deposited  for  the 
security  of  notes,  and  those  courts  have  no  such  jurisdiction.  ( Van  Antwerp 
v.  Hulburd,  7  BlatcJiford  0.  0.  21,  426;  Same,  8  Blatcliford  0.  C.  jR.,  282.) 


140  BANKING  LAWS. 

falsely  made,  forged,  or  counterfeited,  or  shall  falsely  alter, 
or  caviso  cr  procure  to  be  falsely  altered,  or  willingly  aid  or 
assist  in  falsely  altering,  any  such  circulating  notes,,  issued  as 
aforesaid,  or  shall  pass,  utter,  or  publish,  or  attempt  to  pass, 
utter,  or  publish,  as  true,  any  falsely  altered  or  spurious  cir 
culating  note  issued,  or  purporting  to  have  been  issued,  as 
aforesaid,  knowing  the  same  to  be  falsely  altered  or  spurious, 
every  such  person  shall  be  deemed  and  adjudged  guilty  of 
felony,  and  being  thereof  convicted  by  due  course  of  law  shall 
be  sentenced  to  be  imprisoned  arid  kept  at  hard  labor  for  a 
period  of  not  less  than  five  years  nor  more  than  fifteen  years, 
and  fined  in  a  sum  not  exceeding  one  thousand  dollars. 
Making,  p -ocur-  SEC.  60.  And  l>e  it  further  enacted,  That  if  any  person 
ing,  or  having  shall  make  or  engrave,  or  cause  or  procure  to  be  made  or 

false  plates,  dies,  i  i     i?   i  •       i  - 

&c.  engraved,  or  shall  have  in  his  custody  or  possession,  any 

plate,  die,  or  block  after  the  similitude  of  any  plate,  die,  or 
block  from  which  any  circulating  notes  issued  as  aforesaid 
shall  have  been  prepared  or  printed,  with  intent  to  use  such 
plate,  die,  or  block,  or  cause  or  suffer  the  same  to  be  used, 
in  forging  or  counterfeiting  any  of  the  notes  issued  as  afore- 
Having  false         said,  or  shall  have  in  his  custody  or  possession  any  blank 
notes,  note  or  notes  engraved  and  printed  after  the  similitude  of 

any  notes  issued  as  aforesaid,  with  intent  to  use  such  blanks, 
or  cause  or  suffer  the  same  to  be  used  in  forging  or  coun 
terfeiting  any  of  the  notes  issued  as  aforesaid,  or  shall  have 
-or  paper  adapt-  in  his  custody  or  possession  any  paper  adapted  to  the  mak 
ing  of  such  notes,  and  similar  to  the  paper  upon  which  any 
such  notes  shall  have  been  issued,  with  intent  to  use  such 
paper,  or  cause  or  suffer  the  same  to  be  used,  in  forging  or 
counterfeiting  any  of  the  notes  issued  as  aforesaid,  every 
such  person,  being  thereof  convicted  by  due  course  of  law, 
shall  be  sentenced  to  be  imprisoned  and  kept  to  hard  labor 
for  a  term  not  less  than  five  or  more  than  fifteen  years,  and 
fined  in  a  sum  not  exceeding  one  thousand  dollars. 

REPORT  OF  COMPTROLLER. 

comptroller's  re-  SEC.  61.  And  be  it  further  enacted,  That  it  shall  be  the 
rn^nTwha^  dut7  of  the  Comptroller  of  the  Currency  to  report  annually 
to  contain.  to  Congress  at  the  commencement  of  its  session — 


REPORT  OF  COMPTROLLER.  14] 

First.  A  summary  of  the  state  and  condition  of  every 
association  from  whom  reports  have  been  received  the  pre 
ceding  year,  at  the  several  dates  to  which  such  reports  refer, 
with  an  abstract  of  the  whole  amount  of  banking  capital 
returned  by  them,  of  the  whole  amount  of  their  debts  and 
liabilities,  the  amount  of  circulating  notes  outstanding,  and 
the  total  amount  of  means  and  resources,  specifying  the 
amount  of  lawful  money  held  by  them  at  the  times  of  their 
several  returns,  and  such  other  information  in  relation  to 
said  association  as  in  his  judgment  may  be  useful. 

Second.  A  statement  of  the  associations  whose  business 
has  been  closed  during  the  year,  with  the  amount  of  their 
circulation  redeemed  and  the  amount  outstanding. 

Third.  Any  amendment  to  the  laws  relative  to  banking 
by  which  the  system  may  be  improved,  and  the  security  of 
the  holders  of  its  notes  and  other  creditors  may  be  increased. 

Fourth.  The  names  and  compensation  of  the  clerks  em 
ployed  by  him,  and  the  whole  amount  of  the  expenses  of  the 
banking  department  during  the  year.  And  such  report 
shall  be  made  by  or  before  the  first  day  of  December  in 
each  year,  and  the  usual  number  of  copies  for  the  use  of  the 
Senate  and  House,  and  one  thousand  copies  for  the  use  of 
the  Department,  shall  be  printed  by  the  Public  Printer  and 
in  readiness  for  distribution  at  the  first  meeting  of  Con 
gress. 

FOKMER  ACT  REPEALED. 

SEC.  62.  And  be  it  further  enacted ,  That  the  act  entitled  Repeal  of  act  of 
"An  act  to  provide  a  national  currency,  secured  by  a  pledge  February  25>  18G3t 
of  United  States  stocks,  and  to  provide  for  the  circulation 
and  redemption  thereof,"  approved  February  twenty-fifth, 
eighteen  hundred  and  sixty-three,  is  hereby  repealed:  Pro 
vided,  That  such  repeal  shall  not  affect  any  appointments  saving  clause. 
made,  acts  done,  or  proceedings  had,  or  the  organization, 
acts,  or  proceedings  of  any  association  organized  or  in  the 
process  of  organization  under  the  act  aforesaid:  And  pro 
vided.,  also,  That  all  such  associations  so  organized  or  in  Privileges  of  this 
process  of  organization  shall  enioy  all  the  rights  and  priv-  act  conferre  * on 

7  °  .  banks  organized 

ileges  granted,  and  be  subject  to  all  the  duties,  liabilities,  under  former  act 
and  restrictions  imposed  by  this  act,  and  with  the  approval 


142  BANKING  LAWS. 

of  the  Comptroller  of  the  Currency,  in  lieu  of  the  name  spe 
cified  in  their  respective  organization  certificates,  may  take 
any  other  name  preferred  by  them  and  duly  certified  to  the 
Comptroller,  without  prejudice  to  any  right  acquired  under 
this  act,  or  under  the  act  hereby  repealed;  but  no  such 
chan-ge  shall  be  made  after  six  months  from  the  passage 
of  this  act :  Provided,  also,  That  the  circulation  issued  or 
to  be  issued  by  such  association  shall  be  considered  as  a 
part  of  the  circulation  provided  for  in  this  act. 

LIABILITY  OF  EXECUTORS,  TRUSTEES,  &C. 

Estates  hold  by         SEC.  63.   And  be  it  further  enacted,  That  persons  holding 
executors,  &c.,  to  g£ock  ag  executors,  administrators,  guardians,  and  trustees. 

be  liable. 

shall  not  be  personally  subject  to  any  liabilities  as  stock 
holders  ;  but  the  estates  and  funds  in  their  hands  shall  be 
liable  in  like  manner  and  to  the  same  extent  as  the  testator, 
intestate,  ward,  or  person  interested  in  said  trust  funds 
would  be  if  they  were  respectively  living  and  competent  to 
act  and  hold  the  stock  in  their  own  names. 

AMENDMENT  AND  REPEAL  OF  ACT. 

congress  may  re-       SEC.  64,  And  be  it  further  enacted,  That  Congress  may  at 
peal  or  alter  act.    an^  ^'ime  amend,  alter,  or  repeal  this  act. 
Approved  June  3, 1864. 

ACT  OF  JUNE  30, 1864,  CHAPTER  173. 

AN  ACT  TO  PROVIDE  INTERNAL    REVENUE    FOR    THE  SUPPORT  OF    THE   GOVERN 
MENT,  TO  PAY  INTEREST  ON  THE  PUBLIC  DEBT,  AND  FOR  OTHER  PURPOSES. 

TAXES  ON  BANKS  AND  BANKERS,  OTHER  THAN  NATIONAL  BANKS. 

Tax  on  average         SEC.  110.  And  be  it  further  enacted,  That  there  shall  be 

deposits.  levied,  collected,  and  paid  a  tax  of  one  twenty-fourth  of  one 

per  centum  each  month3 1  upon  the  average  amount  of  the 

deposits  of  money,  subject  to  payment  by  check  or  draft,  or 

represented  by  certificates  of  deposit  or  otherwise,  whether 

31.  Taxes  imposed  by  tbis  section  are  now  payable  semi-annually,  on  the 
first  day  of  January  and  July,  by  the  act  of  June  6,  1872,  chapter  315,  sec 
tion  37.  (Seepage  158.) 


TAXES  ON  STATE  BANKS,  &c.  143 

payable  on  demand  or  at  some  future  day,  with  any  person, 
bank,  association,  company,  or  corporation  engaged  in  the 
business  of  banking ; 

And  a  tax  of  one  twenty-fourth  of  one  per  centum  each  ou  capital. 
month,31  as  aforesaid,  upon  the  capital  of  any  bank,  asso 
ciation,  company,  or  corporation,  and  on  the  capital  em 
ployed32  by  any  person  in  the  business  of  banking  beyond 
the  average  amount  invested  in  United  States  bonds. 

And  a  tax  of  one-twelfth  of  one  per  centum  each  month3 1  on  circulation, 
upon  the  average  amount  of  circulation  issued  by  any  bank, 
association,  corporation,  company,  or  person,  including  as 
circulation  all  certified  checks  and  all  notes  and  other  obli 
gations  calculated  or  intended  to  circulate  or  to  be  used  as 
money,  but  not  including  that  in  the  vault  of  the  bank,  or 
redeemed  and  on  deposit  for  said  bank ;  and  an  additional 
tax  of  one-sixth  of  one  per  centum,,  each  month,  upon  the 
average  amount  of  such  circulation,  issued  as  aforesaid,  be 
yond  the  amount  of  ninety  per  centum  of  the  capital  of  any 
such  bank,  association,  corporation,  company,  or  person. 

And  a  true  and  accurate  return  of  the  amount  of  circu-  Returns  to  be 
lation,  of  deposit,  and  of  capital,  as  aforesaid,  and  of  the 
amount  of  notes  of  persons,  State  banks,  or  State  banking 
associations,  paid  out  by  them  for  the  previous  month,  shall 
be  made  and  rendered  monthly  by  each  of  such  banks,  asso 
ciations,  corporations,  companies,  or  persons,  to  the  assessor 
of  the  district  in  which  any  such  bank,  association,  corpora 
tion,  or  company  may  be  located,  or  in  which  such  person 
has  his  place  of  business,  with  a  declaration  annexed  thereto, 
and  the  oath  or  affirmation  of  such  person,  or  of  the  presi 
dent  or  cashier  of  such  bank,  association,  corporation,  or 
company,  in  such  form  and  manner  as  may  be  prescribed  by 
the  Commissioner  of  Internal  Revenue,  that  the  same  con 
tains  a  true  and  faithful  statement  of  the  amounts  subject 
to  tax  as  aforesaid ;  and  for  any  refusal  or  neglect  to  make 

31.  See  note  on  preceding  page. 

32.  The  act  of  June  6,  1872,  chapter  315,  section  37,  provides  that  "  capital 
employed"  shall  not  include  money  borrowed  or  received  from  day  to  day, 
in  the  usual  course  of  hanking  business,  from  any  person  not  a  partner  of,  or 
interested  in,  the  said  bank,  association,  or  firm. 


14,4  BANKING  LAW  to. 

or  to  render  return  and  payment,  any  sucVi  bank,  associa 
tion,  corporation,  company,  or  person  so  in  default  shall  be 
subject  to  and  pay  a  penalty  of  two  hundred  dollars,  besides 
the  additional  penalty  and  forfeitures  in  other  cases  provided 
by  law;  and  the  amount  of  circulation,  deposit,  capital,  and 
notes  of  persons,  State  banks,  and  banking  associations,  paid 
out  as  aforesaid,  in  default  of  the  proper  return,  shall  be 
estimated  by  the  assessor  or  assistant  assessor  of  the  district 
as  aforesaid  upon  the  best  information  he  can  obtain ;  and 
every  such  penalty  may  be  recovered  for  the  use  of  the  United 
States  in  any  court  of  competent  jurisdiction. 

on  hanks  with  And  in  the  case  of  banks  with  branches,  the  tax  herein 
provided  for  shall  be  assessed  upon  the  circulation  of 
each  branch  severally,  and  the  amount  of  capital  of  each 
branch  shall  be  considered  to  be  the  amount  allotted  to 
such  branch ; 

Repeal  of  former  And  so  much  of  an  act  entitled  "An  act  to  provide  ways 
and  means  for  the  support  of  the  Government,"  approved 
March  three,  eighteen  hundred  and  sixty-three,  as  imposes 
any  tax  on  banks,  their  circulation,  capital,  or  deposits,  other 
than  is  herein  provided,  is  hereby  repealed: 

Act  not  to  apply        Provided,  That  this  section  shall  not  apply  to  associa- 

to  national  banks.  tiong  ^kh  are  taxed  under  and  by  virtue  of  the  act  "to 
provide  a  national  currency  secured  by  a  pledge  of  United 
States  bonds,  and  to  provide  for  the  circulation  and  redernp- 

«r,vings  bank*,  tion  thereof."  A  ad  the  deposits  in  associations  or  com 
panies  known  as  provident  associations,  savings  banks, 
savings  funds,  or  savings  institutions,  having  no  capital 
stock,  and  doing  no  other  business  than  receiving  deposits 
to  be  loaned  or  invested  for  the  sole  benefit  of  the  parties 
making  such  deposits,  without  profit  or  compensation  to 
the  association  or  company,  shall  be  exempt  from  tax  on  so 
much  of  their  deposits  as  they  have  invested  in  securities 
of  the  United  States,  and  on  all  deposits  less  than  five 
hundred  dollars33  made  in  the  name  of  any  one  person; 
and  the  returns  required  to  be  made  by  such  provident 
institutions  and  savings  banks  after  July,  eighteen  hundred 


33.  The  exemption  is  extended  to  two  thousand  dollars  by  the  act  of  June 
6,  1872,  chapter  315,  section  37. 


TAX  ON  STATE  BANK  NOTES,  &c.  145 

and  sixty-six,  shall  be  made  on  the  first  Monday  of  January 
and  July  of  each  year,  in  such  form  and  manner  as  may  be 
prescribed  by  the  Commissioner  of  Internal  Revenue.  [As 
amended  by  the  act  of  July  13,  1866,  chapter  184,  §  9.] 


ACT  OF  MARCH  3,  1865,  CHAPTER  78. 

AN  ACT  TO  AMEND  AN  ACT  ENTITLED  "AN  ACT  TO  PROVIDE  INTERNAL  REVENUE 
TO  SUPPORT  THE  GOVERNMENT,  TO  PAY  INTEREST  ON  THE  PUBLIC  DEBT,  AND 
FOR  OTHER  PURPOSES,"  APPROVED  JUNE  30,  1864. 

TAX  ON  NOTES  OF  STATE  BANKS,  &C. 

SEC.  6.  And  be  it  further  enacted,  That  every  national  Ten  per  ceu:,  ta 
banking  association,  State  bank,  or  State  banking  associa-  sons°and state1" 
tion,  shall  pay  a  tax  of  ten  per  centum  34  on  the  amount  banks  used  for 
of  notes  of  any  person,  State  bank,  or  State  banking  associa 
tion,  used  for  circulation  and  paid  out  by  them  after  the  first 
day  of  August,  eighteen  hundred  and  sixty-six,  and  such 
tax  shall  be  assessed  and  paid  in  such  manner  as  shall  be 
prescribed  by  the  Commissioner  of  Internal  Revenue.     [As 
amended  by  act  of  July  13,  1866,  chapter  184,  §  9  bis.] 

CONVERSION  OF  STATE  BANKS  WITH  BRANCHES. 


SEC.  7.     *     *     *     Provided,  That  it  shall  be  lawful  for 


State  banks  with 


anv  bank   or  banking   association   organized   under   State  jjranches  *™y 

J  e  <-  p  '  become  national 

laws,  and   having   branches,  the  capital  being  joint  and  banks  and  retain 
assigned  to  and  used  by  the  mother  bank  and  branches  in 


34.  This  section,  taxing  banks  ten  per  cent,  on  the  amount  of  notes  of 
State  banks  paid  out  by  them,  is  held  to  be  constitutional  by  the  Supreme 
Court  of  the  United  States.  ( Veazie  Bank  v.  Fenno,  8  Wallace,  534.) 

The  tax  applies  to  the  notes  which  a  bank  pays  out  of  its  own  issue  as  well 
as  of  the  issue  of  other  banks.  (Official  Opinion  of  Attorney  General  Wil 
liams,  1872;  Veazie  Bank  v.  Fenno,  8  Wallace,  53-1.) 

The  act  of  March  26,  1867,  chapter  8,  section  2,  lays  a  tax  of  ten  per 
cent,  on  the  notes  of  any  town,  city,  or  municipal  corporation  paid  out  for 
circulation.  (Seepage  148  ) 

And  the  act  of  July  17,  1862,  chapter  196,  section  2,  makes  it  a  penal 
offence  to  make,  issue,  circulate,  or  pay  any  note,  check,  memorandum,  token, 
or  other  obligation  for  a  less  sum  than  one  dollar,  intended  to  circulate  as 
money,  or  to  be  received  or  used  in  lieu  of  lawful  money.  (Seepage  45.) 

10 


146 


BANKING  LAWS. 


G.'.pital  of  State 
banks  converted. 


Circulation  not 
taxable  when  it 
doe?  not  exceed 
five  per  cent,  of 
capital. 


National  banks 
converted  from 
Btate  banks— 


definite  proportions,  to  become  a  national  banking  associa 
tion  in  conformity  with  existing  laws,  and  to  retain  and 
keep  in  operation  its  branches,  or  such  one  or  more  of 
them  as  it  may  elect  to  retain ;  the  amount  of  the  circula 
tion  redeemable  at  the  mother  bank  and  each  branch  to  be 
regulated  by  the  amount  of  capital  assigned  to  and  used  by 
each.  ***** 

CAPITAL  OF  BANKS  CONVERTED. 

SEC.  14.  And  be  it  further  enacted,  That  the  capital  of 
any  State  bank  or  banking  association,  which  has  ceased  or 
shall  cease  to  exist,  or  which  has  been  or  shall  be  converted 
into  a  national  bank,  shall  be  assumed  to  be  the  capital  as 
it  existed  immediately  before  such  bank  ceased  to  exist  or 
was  converted  as  aforesaid. 

CIRCULATION,  WHEN  NOT  TAXABLE. 

And  whenever  the  outstanding  circulation  of  any  bank, 
association,  corporation,  company,  or  person  shall  be  re 
duced  to  an  amount  not  exceeding  five  per  centum  of  the 
chartered  or  declared  capital  existing  at  the  time  the  same 
was  issued,  said  circulation  shall  be  free  from  taxation  ;  3  5 
and  whenever  any  bank  which  has  ceased  to  issue  notes  for 
circulation  shall  deposit  in  the  Treasury  of  the  United 
States,  in  lawful  money,  the  amount  of  its  outstanding  cir 
culation,  to  be  redeemed  at  par,  under  such  regulations  as 
the  Secretary  of  the  Treasury  shall  prescribe,  it  shall  be 
exempt  from  any  tax  upon  such  circulation  ; 

TAX  ON  STATE  BANKS  AFTER  CONVERSION. 

And  whenever  any  State  bank  or  banking  association  has 
been  converted  into  a  national  banking  association,  and  such 

35.  This  provision  relieves  banks  which  are  withdrawing  their  circulation 
or  have  reduced  it  to  five  per  cent,  of  their  capital,  for  any  reason,  from  the 
tax  imposed  on  national  banks  by  section  41  of  the  act  of  June  3,  1864,  (see 
page  125,)  and  on  State  banks  by  section  110  of  the  act  of  June  30,  1864,  as 
amended  by  the  act  of  July  13,  1866,  (see page  142,)  but  net  from  the  ten  per 
cent,  tax  imposed  on  amount  of  notes  of  any  State  bank  or  banking  associa 
tion,  whether  notes  of  their  own  or  those  of  other  banks,  by  section  6  of  the 
act  of  March  3.  1865,  as  amended  by  act  of  July  13,  1866,  section  9.  (See 
page  145.)  (Official  Opinion  of  Attorney  General  Williams,  1872,) 


THREE  PER  CENT.  CERTIFICATES.  147 

national  banking  association  has  assumed  the  liabilities  of  —to  ray  tax  due 

such  State  bank  or  banking  association,  including  the  re-  maiTo return^,  &c. 

demption  of  its   bills,  by  any  agreement  or  understanding 

whatever  with  the  representatives  of  such  State  bank  or 

banking  association,  such  national  banking  association  shall 

be  held  to  make  the  required  return  and  payment  on  the 

circulation  outstanding,  so  long  as  such  circulation  shall 

exceed  five  per  centum  of  the  capital  before  such  conversion 

of  such  State  bank  or  banking  association.     [As  amended  by 

act  of  July  13,  1866,  chapter  184,  §  9  bis.] 


ACT  OF  MARCH  2,  1867,  CHAPTER  194. 

AN  ACT  TO  PEOVIDE  WAYS  AND  MEANS  FOR  THE  PAYMENT  OF  COMPOUND-INTER 
EST  NOTES. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  for  Temporary  loan 
the  purpose  of  redeeming  and  retiring  any  compound-inter-  certificates11  °ent 
est  notes  outstanding,  the  Secretary  of  the  Treasury  is 
hereby  authorized  and  directed  to  issue  temporary  loan 
certificates,36  in  the  manner  prescribed  by  section  four  of 
the  act  entitled  "An  act  to  authorize  the  issue  of  United 
States  notes  and  for  the  redemption  or  funding  thereof,  and 
for  funding  the  floating  debt  of  the  United  States,"  ap 
proved  February  twenty-fifth,  eighteen  hundred  and  sixty- 
two,  bearing  interest  at  a  rate  not  exceeding  three  per 
centum  per  annum,  principal  and  interest  payable  in  law 
ful  money  on  demand ; 

And  said  certificates  of  temporary  loan  may  constitute  May  be  held  by 
and  be  held,  by  any  national  bank  holding  or  owning  the 
same,  as  a  part  of  the  reserve  provided  for  in  sections  thirty- 
one  and  thirty-two  of  the  act  entitled  "An  act  to  provide 
a  national  currency,  secured  by  a  pledge  of  United  States 
bonds,  and  to  provide  for  the  circulation  and  redemption 

36.  By  the  act  of  July  25,  1868,  chapter  237,  the  amount  of  temporary  loan 
certificates  to  be  issued  was  increased  to  seventy-five  millions  dollars,  and  by 
the  act  of  July  12,  1870,  chapter  252,  section  2,  they  are  all  required  to  bo 
called  in  for  payment  as  fast  as  additional  currency  uotes  are  issued  under 
that  act.  When  called  in  for  payment  they  cease  to  bear  interest,  and  can. 
no  longer  be  held  as  part  of  the  bank  reserves.  (Seepage  28.) 


148 


BANKING  LAWS. 


thereof,"  approved  June  three,  eighteen  hundred  and  sixty- 
four  :  Provided,  That  not  less  than  two-fifths  of  the  entire 
reserve  of  such  bank  shall  consist  of  lawful  money  of  the 
United  States:  And  provided  further,  That  the  amount  of 
such  temporary  certificates  at  any  time  outstanding  shall 
not  exceed  fifty  millions  of  dollars. 
Approved,  March  2,  1867. 


Banks  and  bank 
ers  to  pay  ten  per 
cent  tax  on 
amount  of  notes 
-if  tnv/ns,  cities, 
and  municipal 
corporation?  paid 
out  by  them. 


ACT  OF  MARCH  26,  1867,  CHAPTER  8. 

AN  ACT  TO  EXEMPT  WRAPPING  PAPER,  MADE  FROM  WOOD  OR  CORNSTALKS,  FROM 
INTERNAL  TAX,  AND  FOR  OTHER  PURPOSES. 

SEC.  2.  And  be  it  further  enacted,  That  every  national 
banking  association,  State  bank,  or  banker,  or  association 
shall  pay  a  tax  of  ten  per  centum  on  the  amount  of  notes 
of  any  town,  city,  or  municipal  corporation  paid  out  by 
them  after  the  first  day  of  May,  anno  Domini  eighteen 
hundred  and  sixty-seven,  to  be  collected  in  the  mode  and 
manner  in  which  the  tax  on  the  notes  of  State  banks  is 
collected. 

Approved,  March  26, 1867. 


Whore  ohares  of 
banks  may  be 
taxed. 


Shares  of  non 
residents. 


ACT  OF  FEBRUARY  10,  1868,  CHAPTER  7. 
AN  ACT  IN  RELATION  TO  TAXING  SHARES  IN  NATIONAL  BANKS. 

Be  it  enacted  by  the  Senate  and  House*of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That 
the  words  "place  where  the  bank  is  located,  and  not  else 
where,"  in  section  forty-one  of  the  "  act  to  provide  a  national 
currency,"  approved  June  third,  eighteen  hundred  and 
sixty-four,  shall  be  construed  and  held  to  mean  the  State 
within  which  the  bank  is  located;  and  the  Legislature  of 
each  State  may  determine  and  direct  the  manner  and  place 
of  taxing  all  the  shares  of  national  banks  located  within 
said  State,  subject  to  the  restriction  that  the  taxation  shall 
not  be  at  a  greater  rate  than  is  assessed  upon  any  other 
moneyed  capital  in  the  hands  of  individual  citizens  of  such 
State:  And  provided  always,  That  the  shares  of  any  na 
tional  bank  owned  by  non-residents  of  any  State  shall  be 


REPORTS  OF  NATIONAL  BANKS.  149 

taxed  in  the  city  or  town  where  said  bank  is  located,,  and 
not  elsewhere. 

Approved,  February  10, 1868. 

ACT  OF  FEBRUARY  19,  1809,  CHAPTER  32. 
AN  ACT  TO  PREVENT  LOANING  MONEY  UPON  UNITED  STATES  NOTES. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That  offering  or  re- 
no  national  banking  association  shall  hereafter  offer  or  re-  notes^s  security 
ceive  United  States  notes  or  national  bank  notes  as  security  for  loans,  or 

,,     ,  P  r.  P  agreeing  to  with- 

or  as  collateral  security  lor  any  loan  ot  money,  or  lor  a  con-  hold  same  from 
sideration  shall  agree  to  withhold  the  same  from  use,  or  use~ 

~  how  punished. 

shall  offer  or  receive  the  custody  or  promise  of  custody  of 
such  notes  as  security,  or  as  collateral  security,  or  consider 
ation  for  any  loan  of  money;  and  any  national  banking 
association  offending  against  the  provisions  of  this  act  shall 
be  deemed  guilty  of  a  misdemeanor,  and,  upon  conviction 
thereof  in  any  United  States  court  having  jurisdiction  shall 
be  punished  by  a  fine  not  exceeding  one  thousand  dollars, 
and  by  a  further  sum  equal  to  one-third  of  the  money  so 
loaned ;  and  the  officer  or  officers  of  said  bank  who  shall 
make  such  loan  or  loans  shall  be  liable  for  a  further  sum 
equal  to  one-quarter  of  the  money  so  loaned ;  and  the  prose 
cution  of  such  offenders  shall  be  commenced  and  conducted 
as  provided  for  the  punishment  of  offenses  in  an  act  to 
provide  a  national  currency,  approved  June  third,  eight 
een  hundred  and  sixty-four,  and  the  fine  or  penalty  so 
recovered  shall  be  for  the  benefit  of  the  party  bringing  such 
suit. 

Approved,  February  19,  1869. 

ACT  OF  MARCH  3,  1869,  CHAPTER  130. 
AN  ACT  REGULATING  THE  REPORTS  OF  NATIONAL  BANKING  ASSOCIATIONS. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That  Banks  to  make 
in  lieu  of  all  imports  required  by  section  thirty-four  of  the 
national  currency  act,  every  association  shall  make  to  the 


150 


BANKING  LAWS. 


Details  of  reports 


Reports  to  be 
ef-nt  to  the  Comp 
troller; 


lished. 


Comptroller  of  the  Currency  not  less  than  five  reports  dur 
ing  each  and  every  year,  according  to  the  form  which  may 
be  prescribed  by  him,  verified  by  the  oath  or  affirmation  of 
the  president  or  cashier  of  such  association,  and  attested  by 
the  signature  of  at  least  three  of  the  directors ;  which  report 
shall  exhibit,  in  detail  and  under  appropriate  heads,  the 
resources  and  liabilities  of  the  association  at  the  close  of 
business  on  any  past  day  to  be  by  him  specified,  and  shall 
transmit  such  report  to  the  Comptroller  within  five  days 
after  the  receipt  of  a  request  or  requisition  therefor  from 
him;  and  the  report  of  each  association  above  required,  in 
the  same  form  in  which  it  is  made  to  the  Comptroller,  shall 
-also  to  be  pub-  be  published  in  a  newspaper  published  in  the  place  where 
such  association  is  established,  or  if  there  be  no  newspaper 
in  the  place,  then  in  the  one  published  nearest  thereto  in 
the  same  county,  at  the  expense  of  the  association ;  and 
such  proof  of  publication  shall  be  furnished  as  may  be  re 
quired  by  the  Comptroller. 

And  the  Comptroller  shall  have  power  to  call  for  special 
reports  from  any  particular  association  whenever  in  his 
judgment  the  same  shall  be  necessary  in  order  to  a  full  and 
complete  knowledge  of  its  condition. 

Any  association  failing  to  make  and  transmit  any  such 
report  shall  be  subject  to  a  penalty  of  one  hundred  dollars 
for  each  day  after  five  days  that  such  bank  shall  delay  to 
make  and  transmit  any  report  as  aforesaid ;  and  in  case  any 
association  shall  delay  or  refuse  to  pay  the  penalty  herein 
imposed  when  the  same  shall  be  assessed  by  the  Comptroller 
of  the  Currency,  the  amount  of  such  penalty  may  be  retained 
by  the  Treasurer  of  the  United  States,  upon  the  order  of 
the  Comptroller  of  the  Currency,  out  of  the  interest,  as  it 
may  become  due  to  the  association,  on  the  bonds  deposited 
with  him  to  secure  circulation ;  and  all  sums  of  money 
collected  for  penalties  under  this  section  shall  be  paid  into 
the  Treasury  of  the  United  States. 

SEC.  2.  And  be  it  further  enacted,  That,  in  addition  to  said 
reports,  each  national  banking  association  shall  report  to 
the  Comptroller  of  the  Currency  the  amount  of  each  divi 
dend  declared  by  said  association,  and  the  amount  of  net 


Special  reports. 


Penalties. 


Additional  re- 
po;-ts  of  divi 
dends  and  net 


CERTIFYING  CHECKS.  151 

earnings  in  excess  of  said  dividends,  which  report  shall  be 
made  within  ten  days  after  the  declaration  of  each  dividend, 
and  attested  by  the  oath  of  the  president  or  cashier  of  said 
association,  and  a  failure  to  comply  with  the  provisions  of 
this  section  shall  subject  such  association  to  the  penalties 
provided  in  the  foregoing  section. 
Approved,  March  3,  1869. 


ACT  OF  MARCH  3,  1869,  CHAPTER  135. 

AN  ACT  IN  REFERENCE  TO  CERTIFYING  CHECKS  BY  NATIONAL  BANKS. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That  checks  not  to  be 
it  shall  be  unlawful  for  any  officer,  clerk,  or  agent  of  any  ^wn^gain^L 
national  bank  to  certify  any  check  drawn  upon  said  bank  tuai  deposits, 
unless  the  person  or  company  drawing  said  check  shall  have 
on  deposit  in  said  bank  at  the  time  such  check  is  certified 
an  amount  of  money  equal  to  the  amount  specified  in  such 
check ;  and  any  check  so  certified  by  duly  authorized  officers  certified  checks 
shall  be  a  good  and  valid  obligation  against  such  bank;  and  Anally  for  viola- 
any  officer,  clerk,  or  agent  of  any  national  bank  violating  tionof  law. 
the  provisions  of  this  act  shall  subject  such  bank  to  the 
liabilities  and  proceedings  on  the  part  of  the  Comptroller 
as  provided  for  in  section  fifty  of  the  national  banking  law, 
approved  June  third,  eighteen  hundred  and  sixty-four. 

Approved,  March  3,  1869. 


ACT  OF  APRIL  6,  1869,  CHAPTER  11. 

AN  ACT  TO  AMEND  AN  ACT  ENTITLED  "AN  ACT  TO  PROVIDE  A  NATIONAL  CUR 
RENCY  SECURED  BY  A  PLEDGE  OF  UNITED  STATES  BONDS,  AND  TO  PROVIDE  FOR 
THE  CIRCULATION  AND  REDEMPTION  THEREOF,"  APPROVED  JUNE  THIRD,  EIGH 
TEEN  HUNDRED  AND  SIXTY-FOUR,  BY  EXTENDING  CERTAIN  PENALTIES  TO 
ACCESSORIES. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  Aiding  or  abet- 
of  the  United  States  of  America  in  Congress  assembled,  That  tin*  officers  &c- 

J  •'  of  banks,  in  em- 

every  person  who  shall  aid  or  abet  any  officer  or  agent  of  any  bezziementof 
association  in  doing  any  of  the  acts  enumerated  in  section  un^awfu 
fifty-five  of  an  act  entitled  "An  act  to  provide  a  national  punishable. 


152 


BANKING  LAWS. 

currency  secured  by  a  pledge  of  United  States  bonds,  and 
to  provide  for  the  circulation  and  redemption  thereof/'  ap 
proved  June  third,  eighteen  hundred  and  sixty-four,  with 
intent  to  defraud  or  deceive,  shall  be  liable  to  the  same 
punishment  therein  provided  for  the  principal. 
Approved,  April  6,  1869. 


To  what  officers 
penalty  against 
embezzlement 
shall  apply. 


ACT  OF  JULY  8, 1870,  CHAPTER  226. 

AN  ACT  TO  DECLAEE  THE  CONSTRUCTION  OF  .SECTION  FIFTY-FIVE  OF  AN  ACT 
ENTITLED  "AN  ACT  TO  PROVIDE  A  NATIONAL  CURRENCY  SECURED  BY  A  PLEDGE 
OF  UNITED  STATES  BONDS,  AND  TO  PROVIDE  FOR  THE  CIRCULATION  AND  RE 
DEMPTION  THEREOF,"  APPROVED  JUNE  THREE,  EIGHTEEN  HUNDRED  AND 
SIXTY-FOUR,  AND  THE  ACTS  AMENDATORY  THEREOF  AND  TO  AMEND  THE 
SAME. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That 
section  fifty-five  of  the  act  entitled  uAn  act  to  provide  a  na 
tional  currency  secured  by  a  pledge  of  United  States  bonds, 
and  to  provide  for  the  circulation  and  redemption  thereof," 
approved  June  three,  eighteen  hundred  and  sixty-four,  and 
all  acts  amendatory  of  said  section,  shall  be  construed  to 
apply  to  every  president,  director,  cashier,  teller,  clerk,  or 
agent  of  any  banking  association,  whether  organized  under 
the  aforesaid  act  or  under  the  act  entitled  "An  act  to  pro 
vide  a  national  currency  secured  by  a  pledge  of  United  States 
bonds,  and  to  provide  for  the  circulation  and  redemption 
thereof,"  approved  February  twenty-five,  eighteen  hundred 
and  sixty-three. 

Approved,  July  8,  1870. 


ACT  OF  JULY  12,  1870,  CHAPTER  252. 

AN  ACT  TO  PROVIDE  FOR  THE  REDEMPTION    OF    THE    THREE  PER   CENT.  TEMPOR 
ARY  LOAN  CERTIFICATES,  AND  FOR  AN  INCREASE  OF  NATIONAL  BANK  NOTES. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
ionrj  oircu-  of  the  United  States  of  America  in  Congress  assembled,  That 
author-  fifty-four  millions  of  dollars  in  -notes  for  circulation  may  be 

J 


ized—  $54,000,000. 


issued  to  national  banking  -associations,  in  addition  to  the 


INCREASE  OF  BANK  CIRCULATION.  153 

three  hundred  millions  of  dollars  authorized  by  the  twenty- 
second  section  of  the  "Act  to  provide  a  national  currency 
secured  by  a  pledge  of  United  States  bonds,  and  to  provide 
for  the  circulation  and  redemption  thereof,"  approved  June 
three,  eighteen  hundred  and  sixty-four ; 

And  the  amount  of  notes  so  provided  shall  be  furnished  HOW  distributed, 
to  banking  associations  organized  or  to  be  organized  in  those 
States  a,nd  Territories  having  less  than  their  proportion 
under  the  apportionment  contemplated  by  the  provisions  of 
the  "Act  to  amend  an  act  to  provide  a  national  currency, 
secured  by  a  pledge  of  United  States  bonds,  and  to  provide 
for  the  circulation  and  redemption  thereof,"  approved  March 
three,  eighteen  hundred  and  sixty-five,  and  the  bonds  de 
posited  with  the  Treasurer  of  the  United  States,  to  secure 
the  additional  circulating  notes  herein  authorized,  shall  be 
of  any  description  of  bonds  of  the  United  States  bearing 
interest  in  coin,  but  a  new  apportionment  of  the  increased 
circulation  herein  provided  for  shall  be  made  as  soon  as 
practicable,  based  upon  the  census  of  eighteen  hundred  and 
seventy:  Provided,  That  if  applications  for  the  circulation 
herein  authorized  shall  not  be  made  within  one  year  after 
the  passage  of  this  act  by  banking  associations 'organized 
or  to  be  organized  in  States  having  less  than  their  propor 
tion,  it  shall  be  lawful  for  the  Comptroller  of  the  Currency 
to  issue  such  circulation  to  banking  associations  applying 
for  the  same  in  other  States  or  Territories  having  less  than 
their  proportion,  giving  the  preference  to  such  as  have  the 
greatest  deficiency ; 

And  provided  further ,  That  no  banking  association  here-  circulation 
after  organized  shall  have  a  circulation  in  excess  of  five  nouTexeeed" 
hundred  thousand  dollars.  $500,000  each. 

SEC.  2.  And  be  it  further  enacted,  That  at  the  end  of  each  comptroller  to 
month  after  the  passage  of  this  act  it  shall  be  the  duty  of  2St^^ 
the  Comptroller  of  the  Currency  to  report  to  the  Secretary 
of  the  Treasury  the  amount  of  circulating  notes  issued, 
under  the  provisions  of  the  preceding  section,  to  national 
banking  associations  during  the  previous  month; 

Whereupon  the  Secretary  of  the  Treasury  shall  redeem  Three  per  cent, 
and  cancel  an  amount  of  the  three  per  centum  temporary  c 


154 


BANKING  LAWS. 


redeemed  and      loan  certificates  issued  under  the  acts  of  March  two,  eighteen 

hundred  and  sixty-seven,  and  July  twenty-five,  eighteen 

hundred  and  sixty-eight,  not  less  than  the  amount  of  cir 

culating  notes  so  reported,  and  may,  if  necessary,  in  order 

to  procure  the  presentation  of  such  temporary  loan  certifi- 

Notice  to  holders  cates  for  redemption,  give  notice  to  the  holders  thereof,  by 

of  three  per  cent.  pu"blication  or  otherwise,  that  certain  of  said  certificates 

certificates.  ' 

(which  shall  be  designated  by  number,  date,  and  amount) 
shall  cease  to  bear  interest  from  and  after  a  day  to  be  desig 
nated  in  such  notice,  and  that  the  certificates  so  designated 
shall  no  longer  be  available  as  any  portion  of  the  lawful 
monev  reserve  in  possession  of  any  national  banking  asso- 
ciation,  and  after  the  day  designated  in  such  notice  no  in 
terest  shall  be  paid  on  such  certificates,  and  they  shall  not 
thereafter  be  counted  as  a  part  of  the  reserve  of  any  banking 
association. 


NO  longer  to  be 


Banks  may  have 


circulation  of 


each. 

Reserve  of  25  per 
cent,  of  circuia- 

tion  to  be  kept  in 

coin. 


NATIONAL  GOLD  BANKS  AND  GOLD  NOTES. 

SEC.  3.  And  be  it  further  enacted,  That  upon  the  deposit 
of  an^  United  States  bonds,  bearing  interest  payable  in 
gold,  with  the  Treasurer  of  the  United  States,  in  the  man 
ner  prescribed  in  the  nineteenth  and  twentieth  sections  of 
the  national  currency  act,  it  shall  be  lawful  for  the  Comp 
troller  of  the  Currency  to  issue  to  the  association  making 
the  same  circulating  notes  of  different  denominations,  not 
less  than  five  dollars,  not  exceeding  in  amount  eighty  per 
centum  of  the  par  value  of  the  bonds  deposited,  which  notes 
shall  bear  upon  their  face  the  promise  of  the  association  to 
which  they  are  issued  to  pay  them,  upon  presentation  at 
the  office  of  the  association,  in  gold  coin  of  the  United 
States,  and  shall  be  redeemable  upon  such  presentation  in 
such  coin  :  Provided,  That  no  banking  association  organ- 
*zec^  under  ^is  section  shall  have  a  circulation  in  excess 
of  one  million  of  dollars. 

SEC.  4.  And  be  it  further  enacted,  That  every  national 
banking  association  formed  under  the  provisions  of  the  pre- 

.  n     i  •  in  n       • 

ceding  section  01  this  act  shall  at  all  times  keep  on  hand 
not  less  than  twenty-five  per  centum  of  its  outstanding  cir 
culation  in  gold  or  silver  coin  of  the  United  States,  and 


RE-DISTRIBUTION  OF  BANK  CIRCULATION.  155 

receive  at  par  in  the  payment  of  debts  the  gold  notes  Goia  notes  ro 
of  every  other  such  banking  association  which  at  the  time 
of  such  payments  shall  be  redeeming  its  circulating  notes 
in  gold  coin  of  the  United  States. 

SEC.  5.  And  be  it  further  enacted,  That  every  association  National  gold 
organized  for  the  purpose  of  issuing  gold  notes  as  provided  genernib^nking 
in  this  act,  shall  be  subject  to  all  the  requirements  and  pro-  law  with  certain 
visions  of  the  national  currency  act,  except  the  first  clause 
of  section  twenty-two,,  which  limits  the  circulation  of  na 
tional  banking  associations  to  three  hundred  millions  of 
dollars;  the  first  clause  of  section  thirty-two,  which,  taken 
in  connection  with  the  preceding  section,  would  require 
national  banking  associations  organized  in  the  city  of  San 
Francisco  to  redeem  their  circulating  notes  at  par  in  the 
city  of  New  York ;  and  the  last  clause  of  section  thirty- 
two,  which  requires  every  national  banking  association  to 
receive  in  payment  of  debts  the  notes  of  every  other  national 
banking  association  at  par:  Provided,  That  in  applying 
the  provisions  and  requirements  of  said  act  to  the  bank 
ing  associations  herein  provided  for,  the  terms  "  lawful 
money,"  and  " lawful  money  of  the  United  States,"  shall 
be  held  and  construed  to  mean  gold  or  silver  coin  of  the 
United  States. 

DISTRIBUTION  OF  CIRCULATION  OF  CURRENCY  BANKS  AMONG  STATES. 

SEC.  6.  And  be  it  further  enacted,   That  to  secure  a  more  Redistribution  of 
equitable   distribution  of  the   national   banking  currency  circulation to  ex- 

1  ...  .  .          tent  of  $-5,000,000 

there  may  be  issued  circulating  notes  to  banking  associa-  may  be  made  to 
tions  organized  in  States  and  Territories  having  less  than  ^"ofhalTn^' 
their  proportion  as  herein  set  forth.     And  the  amount  of  their  proportion, 
circulation  in  this  section  authorized  shall,  under  the  direc- 
tiori  of  the  Secretary  of  the  Treasury,  as  it  may  be  required 
for  this  purpose,  be  withdrawn,  as  herein  provided,  from 
banking  associations  organized  in  States  having  a  circula 
tion  exceeding  that  provided  for  by  the  act  entitled  "An 
act  to  amend  an  act  entitled  cAn  act  to  provide  for  a  na 
tional  banking  currency  secured  by  pledge  of  United  States 
bonds,  and  to  provide  for  the  circulation  and  redemption 
thereof,'  "  approved   March  three,  eighteen  hundred  and 


156 


BANKING  LAWS. 


flow  reduction 
?hall  be  made 
from  States  hav 
ing  an  excess. 


If  banks  fail  to 
return  circula 
tion  when  requir 
ed,  their  bonds  to 
be  sold  and  notes 
redeemed. 


sixty-five,  but  the  amount  so  withdrawn  shall  not  exceed 
twenty-five  million  dollars.* 

The  Comptroller  of  the  Currency  shall,  under  the  direc 
tion  of  the  Secretary  of  the  Treasury,  make  a  statement 
showing  the  amount  of  circulation  in  each  State  and  Terri 
tory,  and  the  amount  to  be  retired  by  each  banking  associa 
tion  in  accordance  with  this  section,  and  shall,  when  such 
redistribution  of  circulation  is  required,  make  a  requisition 
for  such  amount  upon  such  banks,  commencing  with  the 
banks  having  a  circulation  exceeding  one  million  of  dollars 
in  States  having  an  excess  of  circulation,  and  withdrawing 
their  circulation  in  excess  of  one  million  of  dollars,  and 
then  proceeding  pro  rata  with  other  banks  having  a  circu 
lation  exceeding  three  hundred  thousand  dollars  in  States 
having  the  largest  excess  of  circulation,  and  reducing  the 
circulation  of  such  banks  in  States  having  the  greatest  pro 
portion  in  excess,  leaving  undisturbed  the  banks  in  States 
having  a  smaller  proportion,  until  those  in  greater  excess 
have  been  reduced  to  the  same  grade,  and  continuing  thus 
to  make  the  reduction  provided  for  by  this  act  until  the  full 
amount  of  twenty-five  millions,  herein  provided  for,  shall 
be  withdrawn;  and  the  circulation  so  withdrawn  shall  be 
distributed  among  the  States  and  Territories  having  less 
than  their  proportion,  so  as  to  equalize  the  same.  And  it 
shall  be  the  duty  of  the  Comptroller  of  the  Currency,  under 
the  direction  of  the  Secretary  of  the  Treasury,  forthwith  to 
make  a  requisition  for  the  amount  thereof  upon  the  banks 
above  indicated  as  herein  prescribed. 

And  upon  failure  of  such  associations,  or  any  of  them,  to 
return  the  amount  so  required  within  one  year,  it  shall  be  the 
duty  of  the  Comptroller  of  the  Currency  to  sell  at  public  auc 
tion,  having  given  twenty  days'  notice  thereof  in  one  daily 
newspaper  printed  in  Washington  and  one  in  New  York 
city,  an  amount  of  bonds  deposited  by  said  association,  as 
security  for  said  circulation,  equal  to  the  circulation  to  be 
withdrawn  from  said  association  and  not  returned  in  com 
pliance  with  such  requisition ;  and  the  Comptroller  of  the 
Currency  shall  with  the  proceeds  redeem  so  many  of  the 
notes  of  said  banking  association,  as  they  come  into  the 


INSOLVENT  BANKS  TO  RETIRE  CIRCULATION.  15? 

Treasury,  as  will  equal  the  amount  required  and  not  so  re 
turned,  and  shall  pay  the  balance,  if  any,  to  such  banking 
association : 

Provided^  That  no  circulation  shall  be  withdrawn  under 
the  provisions  of  this  section  until  after  the  fifty-four  mil 
lions  granted  in  the  first  section  shall  have  been  taken  up. 

SEC.  7.  And  be  it  further  enacted,  That  after  the  expira-  Banks  m  suites 
tion  of  six  months  from  the  passage  of  this  act  any  banking  cSatomay' 
association  located  in  any  State  having  more  than  its  pro-  remove  to  states 

-,      .  T  T     ,  a,    z.     i  having  less  than 

portion  of  circulation  may  be  removed  to  any  btate  having  their  proportion. 
less  than  its  proportion  of  circulation,  under  such  rules  and 
regulations  as  the  Comptroller  of  the  Currency,  with  the 
approval  of  the  Secretary  of  the  Treasury,  may  require: 
Provided,  That  the  amount  of  the  issue  of  said  banks  shall 
not  be  deducted  from  the  amount  of  new  issue  provided  for 
in  this  act. 

Approved,  July  12,  1870 


ACT  OF  JULY  14,  1870,  CHAPTER  257, 

AN    ACT    TO    REQUIRE    NATIONAL    BANKS    GOING    INTO    LIQUIDATION    TO    RETIRE 
THEIR  CIRCULATING  NOTES. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives 
of  the  United  States  of  America  in  Congress  assembled,  That  Banks  in  i 
every  bank  that  has  heretofore  gone  into  liquidation  under 


the  provisions  of  section  forty-two  of  the  national  currency  outstanding  eir 
act,  shall  be  required  to  deposit  lawful  money  of  the  United 
States  for  its  outstanding  circulation  within  sixty  days  from 
the  date  of  the  passage  of  this  act. 

And  every  bank  that  may  hereafter  go  into  liquidation   -within  six 
shall  be  required  to  deposit  lawful   money  of  the  United  ™^^go  in 
States  for   its  outstanding   circulation  within    six   months  liquidation— 
from  the  date  of  the  vote  to  go  into  liquidation  ;  whereupon 
the  bonds  pledged  as  security  for  such  circulation  shall  be 
surrendered  to  the  association  making  such  deposit. 

And  if  any  bank  shall  fail  to  make  the  deposit  and  take  —  otuerwi  -e 
up  its  bonds  for  thirty  days  after  the  expiration  of  the  time  ^°^s 
specified,  the  Comptroller  of  the  Currency  shall  have  power 
to  sell  the  bonds  pledged  for  the  circulation  of  said  bank 


158 


BANKING  LAWS. 


Certain  banks 
exempt  from 
above  provisions 
but  to  report  as 
sets  and  liabili 
ties. 


at  public  auction  in  New  York  city,  and  after  providing  for 
the  redemption  and  cancellation  of  said  circulation,  and 
the  necessary  expenses  of  the  sale,  to  pay  over  any  balance 
remaining  from  the  proceeds  to  the  bank  or  its  legal  repre 
sentative  : 

Provided,  That  banks  which  are  winding  up  in  good 
faith  for  the  purpose  of  consolidating  with  other  banks 
shall  be  exempt  from  the  provisions  of  this  act :  And  pro 
vided  further.  That  the  assets  and  liabilities  of  banks  so  in 
liquidation  shall  be  reported  by  the  banks  with  which  they 
are  in  process  of  consolidation. 

Approved,  July  14,  1870. 


ACT  OP  JUNE  6,  1872,  CHAPTER  315. 

AN  ACT  TO  REDUCE  DUTIES  ON  IMPORTS  AND  TO  REDUCE  INTERNAL  TAXES,  AND 
FOR  OTHER  PURPOSES.    3  7 


Taxes  on  State 
banks,  bankers, 
&c.,  to  be  paid 
Femi-nnnually. 


SEC.  37".  That  the  taxes  imposed  by  section  one  hundred 
and  ten  of  the  act  entitled  uAn  act  to  provide  internal 
revenue  to  support  the  Government,  to  pay  interest  on 
the  public  debt,  and  for  other  purposes,"  approved  June 
thirtieth,  eighteen  hundred  and  sixty-four,  as  amended  by 
section  nine  of  the  act  of  July  thirteenth,  eighteen  hun 
dred  and  sixty-six,  to  reduce  internal  taxation  and  to 
amend  the  act  aforesaid  and  acts  amendatory  thereof,  upon 
the  deposits,  capital,  and  circulation  of  banks,  or  persons, 
associations,  companies,  or  corporations  engaged  in  the 
business  of  banking,  shall  hereafter  be  paid  semi-annually, 
on  the  first  day  of  January  and  the  first  day  of  July ;  but 
the  same  shall  be  calculated  at  the  rate  per  month  as 
prescribed  by  said  section,  so  that  the  tax  for  six  months 
shall  not  be  less  than  the  aggregate  would  be  if  the  said 
taxes  were  collected  monthly,  as  prescribed  by  said  section. 

And  the  words  "capital  employed,"  in  said  section,  shall 
not  include  money  borrowed  or  received  from  day  to  day, 
in  the  usual  course  of  business,  from  any  person  not  a 
partner  of  or  interested  in  the  said  bank,  association,  or 
firm. 
savings  banks—  And  the  exemption  from  tax,  authorized  by  said  section. 


What  is  to  be  con 
sideredas  capital 


DEPOSITS  IN  SAVINGS  BANKS.  159 

of  deposits  of  less  than  five  hundred!  dollars,  made  in  the  —deposits  to 

extent  o1 
exempt. 


name  of  one  person,  in  associations  or  companies  known  as  extent  of  S2'(XK 


provident  institutions,  savings  banks,  savings  funds,  or  sav 
ings  institutions,  is  hereby  extended  to  deposits  so  made  of 
not  exceeding  two  thousand  dollars. 

37.  By  the  regulations  of  the  Internal  Revenue  Bureau,  these  taxes  are  to 
be  assessed  monthly,  and  returned  to  the  collector  as  before,  but  the  collector 
will  collect  the  same  only  once  in  six  months. 


NOTES 

RELATIVE  TO  TAXATION  OF  BANKS  UNDER  EXISTING  LAWS. 

On  and  after  October  1,  1872,  no  tax  will  be  imposed  on  notes,  bills  of  ex 
change,  etc.,  except  "bank  checks,  drafts,  or  orders,"  on  which  a  two-cent 
stamp  will  continue  to  be  requisite.  (Act  of  June  6,  1872,  chap.  315,  sec.  36.) 

The  tax  on  dividends  expired  December  31,  1871.  (Act  of  July  14,  1870, 
sec.  15.)  The  special  tax  on  capital  ceased  May  1,  1871.  (Same  act,  sec.  1.) 

United  States  taxes  are  now  levied  on  national  banks  under  section  41,  act 
of  June  3,  1864,  chapter  106.  (See  pp.  125,  160.)  And  on  State  banks  and 
bankers  under  section  110,  act  of  June  30,  1864,  chapter  173,  and  section  37 
of  the  act  of  June  6,  1872,  chapter  315.  (Sec pp.  142,  158.) 

There  is  also  a  law  imposing  a  tax  of  ten  per  cent,  on  notes  of  "persons, 
State  banks,  or  State  banking  associations "  paid  out  by  national  or  State 
banks.  This  is,  virtually,  a  prohibitory  tax.  (See  pp.  145,  146.) 

The  shares  of  national  banks  may  be  taxed  under  State  authority  within  a 
limited  extent,  {foe  p.  126.) 


160  BANKING  LAWS. 


REGULATIONS  AND  INSTRUCTIONS 

IN  RELATION  TO  PAYMENT  OF  DUTIES  BY  NATIONAL  BANKS. 

By  the  forty-first  section  of  the  act  entitled  "An  act  to 
provide  a  national  currency,  secured  by  a  pledge  of  United 
States  bonds  and  to  provide  for  the  redemption  and  circu 
lation  thereof,"  approved  June  3, 1864,  it  is  made  the  duty 
of  the  Treasurer  of  the  United  States  to  prescribe  the  form 
-for  making  return,  by  each  national  banking  association,  of 
the  average  amount  of  its  notes  in  circulation,  the  average 
amount  of  its  deposits,  and  the  average  amount  of  its  capi 
tal  stock  beyond  the  amount  invested  in  United  States 
bonds,  for  each  half  year  from  and  after  the  first  day  of 
January,  eighteen  hundred  and  sixty-four.  In  compliance 
with  this  requirement,  a  form  for  such  return  has  been  pre 
pared,  and  copies  are  furnished  herewith. 

Under  the  law,  a  return  is  to  be  made  within  ten  days 
next  succeeding  the  first  days  of  January  and  July,  in  each 
and  every  year,  for  the  preceding  six  months. 

The  penalty  for  default  in  making  the  return  within  the 
time  fixed  is  two  hundred  dollars. 

Items  subject  tr>  duty. 

item?  subject  to        The  items  made  subject  to  duty  by  the  act  are  circulating 
notes,  deposits  and  capital  stock. 

Dates  of  commencement  of  liability  to  duty. 

when  to  com  The  return  of  these  items  from  all  banks  that  have  before 

made  returns  of  them  will  be  for  the  lull  semi-annual  term 
of  181,  182,  or  184  days,  as  the  case  may  be;  and  of  all 
banks  that  have  not  before  made  returns  of  these  items,  as 
follows : 

Upon  circulating  notes,  from  and  including  the  date  of 
their  first  issue. 

Upon  deposits,  from  and  including  the  date  of  the  first 
deposit  received  by  the  bank. 

Upon  capital  stock,  from  and  including  the  date  of  the 
certificate  of  the  Comptroller  of  the  Currency  authorizing 
the  commencement  of  business  as  a  national  bank. 


PAYMENT  OF  DUTIES.  161 

Amount  of  each  item  subject  to  duty. 

The  amount  of  each  item  subject  to  duty  is  the  average  Amount, 
amount  thereof  for  the  half  year  for  which  duty  is  due. 

Rule  for  ascertaining  average  amounts. 

I.  For  banks  making  estimates  from  daily  statements  of 
balances. 

Add  together  the  daily  balances  of  the  item,  from  the  Average  amount, 
proper  date  of  the  commencement  of  the  liability  of  the  item  how  a9certained 
to  duty,  (including  for  each  Sunday  and  holiday  the  balance 
of  the  first  preceding  business  day,)  to  and  including  the 
30th  day  of  June,  or  the  31st  day  of  December,  as  the  case 
may  be.  This  aggregate  of  daily  balances,  for  the  first  six 
months  of  any  year,  will  be  divided  by  181,  the  number  of 
days  from  January  1  to  June  30,  except  in  leap  year,  when 
the  sum  will  be  divided  by  182.  The  aggregate  of  daily 
balances  for  the  last  six  months  of  any  year  will  be  divided 
by  184,  the  number  of  clays  from  July  1  to  December  31. 

II.  For  banks  making  estimates  from  weekly  statements  of 
balances. 

Banks  not  making  daily  statements,  and  which  obtain 
their  averages  from  weekly  statements,  should  add  together 
the  weekly  balances,  including  for  each  day,  in  any  frac 
tional  part  of  a  week,  one-seventh  of  the  weekly  balance 
next  preceding  such  fractional  part.  The  aggregate  of  bal 
ances  for  the  first  six  months  of  any  year  will  be  divided  by 
the  number  of  weeks  from  January  1  to  June  30,  (25  6-7, 
or  26,  as  the  case  may  be.)  The  aggregate  of  balances  for 
the  last  six  months  will  be  divided  by  26  2-7,  the  number 
of  weeks  from  July  1  to  December  31. 

(Banks  having  items  subject  to  duty  for  periods  less  than 
a  half  year,  which  make  their  estimates  from  daily  balances, 
will  divide  the  aggregate  of  the  balances  of  each  item,  for 
the  time  for  which  it  is  liable  to  duty,  by  the  number  of 
days  in  the  half  year ;  and  banks  having  like  items,  which 
make  their  estimates  from  weekly  balances,  by  the  number 
of  weeks  and  fractions  thereof  in  the  half  year.) 

The  quotients  thus  found  will  be  the  average  amounts 
subject  to  duty  for  each  six  months  respectively,  and  should 
be  entered  in  the  statement  under  the  heading  "Dutiable 
amount,"  and  duty  is  to  be  computed  thereon  at  the  full 
semi-annual  rate. 

Duty  on  circulation. 

The  duty  on  circulating  notes  is  one-half  of  one  per  centum  Duty  on  circuia- 
on  the  average  amount  outstanding  for  the  six  months.          won. 
11 


1G2  BANKING  LAWS. 

Liability  on  this  item  would  commence  on  the  first  days 
of  January  and  July  in  each  and  every  year,  unless  a  bank 
had  at  that  time  no  circulation  outstanding,  in  which  case 
it  would  commence  with  the  date  of  the  first  issue  of  notes, 
and  terminate  on  the  30th  day  of  June  or  the  31st  day  of 
December,  (as  the  case  may  be,)  date  of  commencement  arid 
termination  both  included. 

Duty  on  deposits. 

or  deposits.  Under  this  head  must  be  included  the  balances  on  hand, 

when  the  books  of  the  bank  are  closed  for  the  day,  which 
are  subject  to  payment  on  check  or  draft,  or  on  return  of 
certificate  of  deposit,  (except  deposits  made  to  the  credit  of 
the  Treasurer  of  the  United  States  with  a  national  bank 
depositary,)  whether  made  by  individuals,  banks,  savings 
banks,  bankers,  or  by  States,  cities,  or  towns,  whether  cer 
tificates  or  certified  checks  have  been  issued  therefor  or  not, 
and,  in  fact,  all  descriptions  of  deposits,  except  as  above  ex- 
cepted,  which  may  be  used  by  the  bank,  or  from  which  it 
may  derive  profits,  including  deposits  upon  which  the  bank 
pays  interest,  whether  any  part  of  either  of  such  items  are 
directly  in  the  possession  of  the  bank  or  in  the  hands  of  an 
agent  or  agents. 

The  average  amount  of  deposits,  including,  in  the  case 
of  a  depositary,  the  average  amount  to  the  credit  of  the 
Treasurer  of  the  United  States  from  the  first  days  of  Janu 
ary  and  July,  (or,  in  case  the  bank  had  not  then  commenced 
to  receive  deposits,  from  the  date  of  the  first  deposit,)  to  the 
30th  of  June,  or  the  31st  of  December,  (as  the  case  may  be,) 
date  of  commencement  and  termination  both  included,  will 
first  be  set  down  in  the  return.  From  this  average  amount, 
depositaries  will  be  entitled  to  deduct  the  average  amount 
on  deposit  to  the  credit  of  the  Treasurer  of  the  United 
States.  Upon  the  remainder,  which  will  be  considered  the 
deposits  subject  to  duty,  is  to  be  levied  a  duty  of  one-fourth 
of  one  per  centum  semi-annually. 

Duty  on  capital  stock. 

on  capital  stock.  The  capital  stock  on  which  duty  is  levied  is  held  to  be 
that  portion  of  the  paid-up  capital  stock  which  is  in  excess 
of  the  United  States  bonds  owned  by  the  bank.  The  aver 
age  amount  of  the  paid-up  capital  from  the  first  days  of 
January  or  of  July  (or,  in  case  certificate  of  authority  to 
commence  business  had  not  then  been  issued  by  the  Comp 
troller  of  the  Currency,  from  the  date  of  such  certificate)  to 
the  30th  day  of  June  or  the  31st  day  of  December,  date  of 


PAYMENT  OF  DUTIES.  163 

commencemeiit  and  termination  both  included,  will  first  be 
set  down  in  the  return.  From  this  average  amount  deduc 
tion  will  be  made  of  the  average  amount  of  United  States 
bonds,  at  their  face  value,  owned  by  the  bank,  including 
the  bonds  on  deposit  with  the  Treasurer  of  the  United 
States  as  security  for  circulation,  or  for  other  purposes. 

The  rate  of  duty  on  capital  stock  is  one-fourth  of  one  per 
cent,  semi-annually. 

The  actual  capital  paid  in  will  be  returned,  without  re 
gard  to  the  amount  specially  authorized.  Thus,  an  institu 
tion  should  include  in  the  capital  liable  to  duty  any  increase 
which  has  been  paid  in,  although  such  increase  shall  not 
at  tke  date  of  the  return  have  received  the  approval  of  the 
Comptroller  of  the  Currency. 

The  term  "United  States  bonds,"  as  used  in  the  act,  is 
construed  to  mean  only  coupon  or  registered  bonds,  and  not 
any  portion  of  what  is  considered  temporary  debt,  such  as 
seven  and  three-tenths  treasury  notes,  certificates  of  indebt 
edness,  five  per  cent,  notes,  compound-interest  notes,  or 
temporary  loan  certificates. 

Payment  of  duty. 

The  duty  levied  by  the  section  referred  to  is  required  by  payment  of  duty 
law  to  be  paid  to  the  Treasurer  of  the  United  States  in  the 
months  of  January  and  July  in  each  and  every  year,  in 
default  of  which  payment  provision  is  made  for  its  collection 
by  the  Treasurer  out  of  the  interest  on  securities  in  his 
hands,  and  may  be  made  in  any  one  of  the  following  ways: 

1st.  By  a  deposit  of  the  amount  of  duty  to  the  credit  of 
the  Treasurer  of  the  United  States,  with  him,  or  with  any 
Assistant  Treasurer  of  the  United  States,  or  designated  de 
positary,  including  all  national  banks,  designated  as  such, 
and  including  the  bank  making  payment,  if  a  depositary. 
Triplicate  certificates  should  be  issued  therefor,  the  original 
of  which  must  be  forwarded  to  the  Secretary  of  the  Treasury, 
the  duplicate  to  the  Treasurer,  and  the  triplicate  held  by 
the  party  making  the  deposit,  in  which  certificate  it  should 
be  stated  that  the  deposit  is  "on  account  of  semi-annual 
duty." 

Depositaries  should  be  careful  to  distinguish  the  deposit 
on  this  account ,  as  a  duty  from  banks,  so  as  not  to  confound 
it  with  deposits  on  account  of  internal-revenue  tax,  to  which 
latter  class  it  does  not  belong,  and  should  make  the  certifi 
cate  therefor  in  the  name  of  the  depositing  bank,  and  not  in 
MIO  name  or  one  of  its  officers. 

2d.  J3y  remittance  to  this  office  of  the  amount  of  duty  in 
hi \viiil  nioaoy  of  the  United  States,  or  the  notes  of  national 


164  BANKING  LAWS. 

banks ;  the  expense  and  risk  of  transmission  to  be  borne  by 
the  party  remitting. 

3d.  By  draft  payable  to  the  order  of  the  Treasurer  of  the 
United  States,  on  either  of  the  cities  of  Washington,  New 
York,  Boston,  or  Philadelphia,  to  be  made  payable  in  the 
lawful  money  of  the  United  States,  or  the  notes  of  national 
banks. 

Payment  will  not  be  considered  in  such  cases  as  having 
been  made  until  the  drafts  shall  have  been  collected,  and  in 
no  case  until  the  semi-annual  statement  has  been  examined 
at  this  office. 

When  the  draft  is  collected,  certificates  of  payment  of 
duty  will  be  forwarded  by  the  Treasurer  to  the  bank. 

National  banks  should  be  careful  always  to  insert  the 
name  of  the  State  in  which  they  are  located,  and  to  address 
all  correspondence  relating  to  semi-annual  duty  to  the 
Treasurer  of  the  United  States, 


ACTS  OF  CONGRESS. 


ACT  OF  JUNE  29, 1874. 

AN  ACT  FIXING  THE  AMOUNT  OF   UNITED  STATES  NOTES,  PROVIDING  FOE  A  RE 
DISTRIBUTION  OF  THE  NATIONAL  BANK  CURRENCY,  AND  FOR  OTHER  PURPOSES. 

DESIGNATION    OF   BANK   ACT. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  the 
act  entitled  "An  act  to  provide  a  national  currency  secured  Designation  of 
by  a  pledge  of  United  States  bonds,  and  to  provide  for  the 
circulation  and  redemption  thereof,"  approved  June  3, 
1864,  shall  hereafter  be  known  as  "  the  national  bank  act."  see  page  101. 

BANK    RESERVES. 

SEC.  2.  That  section  31  of  "the  national  bank  act"  be  Banks  not  to 
so  amended  that  the  several  associations  therein  provided  reTepr°eVn  ac-a 
for  shall  not  hereafter  be  required  to  keep  on  hand  any  lation. 
amount  of  money  whatever  by  reason  of  the  amount  of 
their  respective  circulations ;  but  the  moneys  required  by 
said  section  to  be  kept  at  all  times  on  hand  shall  be  deter 
mined  by  the  amount  of  deposits  in  all  respects,  as  pro-  see  page  iao. 
vided  for  in  the  said  section. 

REDEMPTION   OF   CIRCULATION. 

SEC.  3.  That  every  association  organized,  or  to  be  organ-  —to- keep  5  per 

n  -1,1  ••  />  ji  •  -i  t      n  ,1  i     cent,  of  reserves 

ized,  under  the  provisions  of  the  said  act,  and  of  the  several  in  united  states 

i  *»      i      11  11      •  i  it  Treasury  for  re 

acts  amendatory  thereof,  shall  at  all  times  keep  and  have  demotion  of  eir- 

on  deposit  in  the  Treasury  of  the  United  States,  in  lawful 

money  of  the  United  States,  a  sum  equal  to  5  per  centum 

of  its  circulation,  to  be  held  and  used  for  the  redemption 

of  such  circulation;  which  sum  shall  be  counted  as  a  part  see  page  lao. 

of  its  lawful  reserve,  as  provided  in  section  2  of  this  act; 

And  when  the  circulating  notes  of  any  such  associations,  circulation,  how 
assorted  or  unassorted,  shall  be  presented  for  redemption 
in  sums  of  $1,000  or  any  multiple  thereof  to  the  Treasurer 
of  the  United  States,  the  same  shall  be  redeemed  in  United 

(165) 


168  BANKING  LAWS. 

States  notes.  All  notes  so  redeemed  shall  be  charged  by 
the  Treasurer  of  the  United  States  to  the  respective  asso 
ciations  issuing  the  same,  and  he  shall  notify  them  severally 
on  the  first  day  of  each  month,  or  oftener,  at  his  discretion, 
of  the  amount  of  such  redemptions;  and  whenever  such 
redemptions  for  any  association  shall  amount  to  the  sum 
of  $500,  such  association  so  notified  shall  forthwith  deposit 
with  the  Treasurer  of  the  United  States  a  sum  in  United 
States  notes  equal  to  the  amount  of  its  circulating  notes  so 
Notes  mutilated,  redeemed.  And  all  notes  of  national  banks,  worn,  defaced, 

A-c.,  to  be  for-  -IT 

warded  by  assist-  mutilated,  or  otherwise  unfit  for  circulation,  shall,  when 

ant  treasurers, 

&c.,  for redemp-    received  by  any  assistant  treasurer  or  at  any  designated 

tion.  "  o 

depository  of  the  United  States,  be  forwarded  to  the  Treas 
urer  of  the  United  States  for  redemption  as  provided 
herein.  And  when  such  redemptions  have  been  so  reim 
bursed,  the  circulating  notes  so  redeemed  shall  be  for 
warded  to  the  respective  associations  by  which  they  were 
issued;  but  if  any  of  such  notes  are  worn,  mutilated, 
defaced,  or  rendered  otherwise  unfit  for  use,  they  shall 
be  forwarded  to  the  Comptroller  of  the  Currency  and  de 
stroyed,  and  replaced  as  now  provided  by  law: 
Banks  to  pay  cost  Provided,  That  each  of  said  associations  shall  reimburse 

of  transportation.     .        ,,         rn  IP 

to  the  .treasury  the  charges  for  transportation  and  the 
costs  for  assorting  such  notes ;  and  the  associations  here 
after  organized  shall  also  severally  reimburse  to  the  Treas 
ury  the  cost  of  engraving  such  plates  as  shall  be  ordered 
by  each  association  respectively;  and  the  amount  assessed 
upon  each  association  shall  be  in  proportion  to  the  circu 
lation  redeemed,  and  be  charged  to  the  fund  on  deposit 
with  the  Treasurer: 

Banks  to  redeem       And  provided  further,  That  so  much  of  section  32  of  said 
thef* own" count-  national  bank  act  requiring  or  permitting  the  redemption 

ers  or  at  United  ,.   .,         .          ,     ,.  .    ., 

smtes  Treasury,    or  its  circulating  notes  elsewhere  than  at  its  own  counter, 
seepage  i«3.  except  as  provided  for  in  this  section,  is  hereby  repealed. 

WITHDRAWAL    OF    CIRCULATION. 

Banks  desiring         SEC.  4.  That  any  association  organized  under  this  act,  or 

to  withdraw  then  r>  ,*,  ,,       -,  .    ,      . ,  .  ,  .    . 

fircuiation  and     any  or  the  acts  or  winch  this  is  an  amendment,  desiring  to 

bonds  may  de-  •    i    i  •  • 

posit  united         withdraw  its  circulating  notes,  in  whole  or  in  part   may, 

btntes  notes.  L          '  J  ' 


HE-DISTRIBUTION  OF  BANK  CIRCULATION.  167 

upon  the  deposit  of  lawful  money  with  the  Treasurer  of 
the  United  States  in  sums  of  not  less  than  $9,000,  take  up 
the  bonds  which  said  association  has  on  deposit  with  the 
Treasurer  for  the  security  of  such  circulating  notes;  which 
bonds  shall  be  assigned  to  the  bank  in  the  manner  specified 
in  the  nineteenth  section  of  the  national  bank  act;  and  the 
outstanding  notes  of  said  association,  to  an  amount  equal  see  pnjros 
to  the  legal-tender  notes  deposited,  shall  be  redeemed  at 
the  Treasury  of  the  United  States,  and  destroyed  as  now 
provided  by  law: 

Provided,  That  the  amount  of  the  bonds  on  deposit  for 
circulation  shall  not  be  reduced  below  §50,000. 

CHARTER    NUMBER    ON    NOTES. 

Sec.  5.  That  the  Comptroller  of  the  Currency  shall,  under  charter  number* 

•  01  m  to  be  printed  on 

fctich  rules  and  regulations  as  the  Secretary  of  the  Treasury  notes. 
nuvv  prescribe,  cause  the  charter  numbers  of  the  associa 
tion  to  be  printed  upon  all  national  bank  notes  which  may  seepage  :  is. 
be  hereafter  issued  by  him. 

LIMIT  OF  UNITED  STATES  NOTES. 

SEC.  6.  That  the  amount  of  United  States  notes  outstand-  Amount  of 
ing  and  to  be  used  as  apart  of  the  circulating  medium  shall  notes  limited. 
not  exceed  the  sum  of  §382,000,000,  which  said  sum  shall  see  pa^es  ss, 
appear  in  each  monthly  statement  of  the  public  debt,  and 
no  part  thereof  shall  be  held  or  used  as  a  reserve. 

REDISTRIBUTION    OF    BANK    CIRCULATION. 

SEC.  7.  That  so  much  of  the  act  entitled  "An  act  to  pro-  Redistribution  oi 

.  -.  .  n     -i  fifty-five  millions 

vide  for  the  redemption  of  the  3  per  centum  temporary  circulation  from 

,  . «  ,  banks  in  States 

loan   certificates,   and  for  an    increase   of  national    bank   having  above 

.  '  their  proportion 

notes,    as  provides  that  no  circulation  shall  be  withdrawn,  to  banks  instates 

'    having  less. 

under  the  provisions  of  section  6  of  said  act,  until  after  the 
fifty-four  millions  granted  in  section  1  of  said  act  shall 
have  been  taken  up,  is  hereby  repealed;  see  page  155, 

Audit  shall  be  the  duty  of  the  Comptroller  of  the  Cur 
rency,  under  the  direction  of  the  Secretary  of  the  Treasury, 
to  proceed  forthwith,  and  he  is  hereby  authorized  and  re- 


168 


BANKING  LAWS. 


Proceedings 
upon  banks  fail 
ing  to  comply 
with  order  of 
Comptroller  to 
withdraw  circu 
lation. 


quired,  from  time  to  time,  as  applications  shall  be  duly 
made  therefor,  and  until  the  full  amount  of  §55,000,000 
shall  be  withdrawn,  to  make  requisitions  upon  each  of  the 
national  banks  described  in  said  section,  and  in  the  manner 
therein  provided,  organized  in  States  having  an  excess  of 
circulation,  to  withdraw  and  return  so  much  of  their  circu 
lation  as  by  said  act  may  be  apportioned  to  be  withdrawn 
from  them,  or,  in  lieu  thereof,  to  deposit  in  the  Treasury 
of  the  United  States  lawful  money  sufficient  to  redeem  such 
circulation,  a'nd  upon  the  return  of  the  circulation  required, 
or  the  deposit  of  lawful  money,  as  herein  provided,  a  pro 
portionate  amount  of  the  bonds  held  to  secure  the  circula 
tion  of  such  association  as  shall  make  such  return  or  deposit 
shall  be  surrendered  to  it. 

SEC.  8.  That  upon  the  failure  of  the  national  banks  upon 
which  requisition  for  circulation  shall  be  made,  or  of  any 
of  them,  to  return  the  amount  required,  or  to  deposit  in 
the  Treasury  lawful  money  to  redeem  the  circulation  re 
quired,  within  thirty  days,  the  Comptroller  of  the  Currency 
shall  at  once  sell,  as  provided  in  section  49  of  the  national 
currency  act,  approved  June  3,  1864,  bonds  held  to  secure 
the  redemption  of  the  circulation  of  the  association  or  asso 
ciations  which  shall  so  fail,  to  an  amount  sufficient  to  re 
deem  the  circulation  required  of  such  association  or  asso 
ciations,  and  with  the  proceeds,  which  shall  be  deposited 
sco  page  133.  in  the  Treasury  of  the  United  States,  so  much  of  the  circu 
lation  of  such  association  or  associations  shall  be  redeemed 
as  will  equal  the  amount  required  and  not  returned ;  and 
if  there  be  any  excess  of  proceeds  over  the  amount  required 
for  such  redemption,  it  shall  be  returned  to  the  association 
or  associations  whose  bonds  shall  have  been  sold. 

And  it  shall  be  the  duty  of  the  Treasurer,  assistant  treas 
urers,  designated  depositaries,  and  national  bank  deposit 
aries  of  the  United  States,  who  shall  be  kept  informed  by 
the  Comptroller  of  the  Currency  of  such  associations  as 
shall  fail  to  return  circulation  as  required,  to  assort  and 
return  to  the  Treasury  for  redemption  the  notes  of  such 
associations  as  shall  come  into  their  hands  until  the  amount 
required  shall  be  redeemed,  and  in  like  manner  to  assort 


RE-DISTRIBUTION  OF  BANK  CIRCULATION. 

and  return  to  the  Treasury  for  redemption  the  notes  of 
such  national  banks  as  have  failed,  or  gone  into  voluntary 
liquidation  for  the  purpose  of  winding  up  their  affairs,  and 
of  such  as  shall  hereafter  so  fail  or  go  into  liquidation. 

SEC.  9.  That  from  and  after  the  passage  of  this  act  it  circulation  to  bo 
shall  be  lawful  for  the  Comptroller  of  the  Currency,  and  instates  emitted 

,  ,          ,  .,..,.  .   ,  to  same,  and  new 

he  is  hereby  required,  to  issue  circulating  notes,  without  banks  may  be  oi> 
delay,  as  applications  therefor  are  made,  not  to  exceed  the 
sum  of  $55,000,000,  to  associations  organized,  or  to  be  or 
ganized,  in  those  States  and  Territories  having  less  than 
their  proportion  of  circulation,  under  an  apportionment 
made  on  the  basis  of  population  and  of  wealth,  as  shown 
by  the  returns  of  the  census  of  1870;  and  every  association 
hereafter  organized  shall  be  subject  to,  and  be  governed 
by  the  rules,  restrictions,  and  limitations,  and  possess  the 
rights,  privileges,  and  franchises,  now  or  hereafter  to  be  seepages 
prescribed  by  law  as  to  national  banking  associations,  with 
the  same  power  to  amend,  alter,  and  repeal  provided  by 
uthe  national  bank  act;" 

Provided,  That  the  whole  amount  of  circulation  with-  Amount  to  be 
drawn  and  redeemed  from  banks  transacting  business  shall 
not  exceed  §55,000,000,  and  that  such  circulation  shall  be 
withdrawn  and  redeemed  as  it  shall  be  necessary  to  supply 
the  circulation  previously  issued  to  the  banks  in  those 
States  having  less  than  their  apportionment:  And  provided 
further,  That  not  more  than  $30,000,000  shall  be  withdrawn 
and  redeemed  as  herein  contemplated  during  the  fiscal 
year  ending  June  30,  1875. 

APPROVED  June  20,  1874. 


UNITED  STATES  BONDS 

CALLED    IN    FOE    KEDEMPTION, 

BEING  BONDS  ISSUED  UNDER  ACT  OF  FEBRUARY  25,  1862 
CALLED  FIVE-TWENTIES  OF  18G2. 


NOTE. — For  an  account  of  this  loan  and  a  list  of  the  bonds  redeemable 
under  the  first,  second,  third,  and  fourth  calls,  see  pages  17, 18,  19,  and  20. 

Fifth  calL  FIFTH  CALL. — Notice  dated  June  6,  1873. 

Of  the  third  series,  all  coupon  bonds  of — 

$50  numbered  1,201  to    6,200  inclusive. 
$100         "         4,753  to  20,000 
$500         "         3,001  to  10,700 
$1,000  5,734  to  22,600 

All  registered  bonds  of — 

$50  numbered    1,234  to    1,320  inclusive. 


$100 

$500 

$1,000 

$5,000 

$10,000 


8,804  to  9,500 
5,361  to  5,700 
20,681  to  23,300 
6,403  to  7,500 
7,093  to  9,680 


Which  ceased  to  bear  interest  September  6,  1873. 

sixth  caii.  SIXTH  CALL. — Notice  dated  August  16,  1873, 

Of  the  third  series,  all  coupon  bonds  of — 

$50  numbered    6,201  to  10,200  inclusive. 
$100         "         20,001  to  30,750 
$500         "         10,701  to  15,800        " 
$1,000         "         22,601  to  36,000 

All  registered  bonds  of — 

$50  numbered    1,321  to    1,375  inclusive. 
$100         "  9,501  to  10,300 

$500         "  5,701  to    6,100 

$1,000         "         23,301  to  25,000 
$5,000         "  7,501  to    7,900 

$10,000         "  9,681  to  10,100 

Which  ceased  to  bear  interest  November  16,  1873. 

(170) 


BOSTDS  CALLED  IN  FOR  REDEMPTION.  171 

SEVENTH  CALL.  —  Notice  dated  November  1,  1873.  seventh  can. 

Of  the  third  series,  all  coupon  bonds  of-  — 

$50  numbered  10,201  to  10,600  inclusive. 
$100         "         30,751  to  34,000 
$500         "         15,801  to  17,600 
$1,000          "          36,001  to  41,000 

All  registered  bonds  of  — 

$50  numbered    1,376  to    1,410  inclusive. 
$100         "         10,301  to  10,560 
$500         "  6,101  to    6,300 

$1,000          "          25,001  to  25,650 
$5,000         "  7,901  to    8,100 

$10,000         "         10,101  to  10,320 
Which  ceased  to  bear  interest  February  1,  1874. 

EIGHTH  CALL.  —  Notice  dated  June  3,  1874.  Eighth  can. 

Of  the  third  series,  all  coupon  bonds  of  — 

$50  numbered  10,601  to  12,100  inclusive. 
$100         "         34,001  to  37,400 
$500         "         17,601  to  19,300 
81,000          "         41,001  to  46,100 

All  registered  bonds  of  — 

$50  numbered    1,411  to    1,450  inclusive. 
$100         "         10,561  to  10/680 
$500         "  6,301  to    6,390 

$1  000         "         25,651  to  26,100 
$5,000         "  8,101  to    8,300 

$10,000          "          10,321  to  10,509 
Which  ceased  to  bear  interest  September  3,  1874. 


CALL.  —  Notice  dated  June  5,  1874.  ninth  can. 

Of  the  third  series,  all  coupon  bonds  of  — 

$50  numbered  12,101  to  12,200  inclusive. 
$100         "         37,401  to  38,200 
$500         "         19,301  to  19,400 
$1,000  46,101  to  47,300 

All  registered  bonds  of  — 

$50  numbered    1,451  to    1,460  inclusive. 
$100         "         10,681  to  10,700 
$500         "  6,391  to    6,400 

$1  000         "         26,101  to  26,166 
$5,000          "  8,301  to    8,303 

$10,000         "         10,510  to  10,517 
Which  ceased  to  bear  interest  September  5,  1874. 


A    FULL    DESCRIPTION 

OF   THE 

FUNDED  AND  BONDED  DEBTS 

OF    THE 

DISTRICT  OF  COLUMBIA, 


INCLUDING    THOSE    OF   THE   CITIES    OF 


WASHINGTON  AND  GEORGETOWN. 


The  intimate  and  dependent  relation  which  the  District  of  Colum 
bia  bears  to  Congress  and  to  the  United  States  Government,  as  well 
as  the  measures  taken  by  the  latter  by  the  act  of  June  20,  1874,  to 
fund  the  floating  debt  of  the  District  (which  will  embrace  nearly  one 
half  of  the  whole  general  indebtedness)  into  bonds,  for  the  payment 
j/  which  the  faith  of  the  United  States  is  thereby  pledged,  leads  to  the 
general  understanding  and  conclusion  that  all  the  debts  of  the  Dis- 

•T^  O 

trict  contracted  under  the  forms  of  local  government,  which  Con 
gress  has  at  different  periods  set  up  and  organized  therein,  may  be 
regarded  as  so  far  debts  or  obligations  of  the  United  States  that  Con 
gress  will  make  all  the  provisions  necessary  for  the  prompt  payment 
of  the  same,  principal  and  interest,  either  by  taxation  or  by  appro 
priations  out  of  the  National  Treasury. 

The  Constitution,  in  clause  17,  section  8,  article  1,  confers  upon 
Congress  the  power  "  to  exercise  exclusive  legislation  in  all  cases 
whatsoever  over  such  District,  (not  exceeding  ten  miles  square,)  as 
may,  by  cession  of  particular  States  and  the  acceptance  of  Congress, 
become  the  seat  of  Government  of  the  United  States." 

This  territory  was  ceded  to  the  United  States  for  that  purpose,  and 
neither  the  people  residing  therein  nor  the  States  have  any  control 
over  the  same,  except  such  as  maybe  authorized  by  Congress. 

(173) 


174  DEBTS  OF  THE  DISTRICT  OF  COLUMBIA. 

The  Judiciary  Committee  of  the  House  of  Representatives  of  the 
Forty-third  Congress,  in  a  report,  says : 

"In  strict  legal  sense,  there  can  be  said  to  be  no  such  thing  as  a 
local  government  of  the  District  of  Columbia,  for  there  can  he  no 
government  within  the  District  independent  of  that  of  the  Federal 
Government;  and  whatever  local  authority  there  maybe  now  ex 
isting,  or  which  may  be  hereafter  set  up  within  the  District,  it  can 
only  be  regarded  legally  as  an  agency  of  the  Federal  Government; 
and  whatever  authority  this  local  government  may  exercise,  it  must 
be  regarded  as  the  act  of  the  United  States  through  their  delegated 
representative." 

The  people  can  neither  create  debts  nor  raise  money  by  taxation 
to  carry  on  a  government  therein  of  any  kind,  nor  to  pay  outstanding 
obligations,  unless  first  authorized  by  Congress  to  form  a  govern 
ment. 

The  debts  hereinafter  described  have  all  been  created  under  local 
governments,  set  up  and  organized  by  Congress,  acting  according  to 
the  report  of  the  Judiciary  Committee  above  referred  to,  as  the 
"  agents  of  the  Federal  Government,"  and  such  obligations  must  be 
regarded  as  the  "  acts  of  the  United  States  through  their  delegated 
representatives." 

For  a  time  there  were  three  separate  local  governments  set  up  by 
Congress:  those  of  the  city  of  Washington,  the  city  of  Georgetown, 
and  the  county  of  Washington  outside  of  said  cities.  Subsequently 
they  were  all  abolished,  and  a  general  government  for  the  whole 
District  established,  with  a  governor,  council,  and  legislative  assem 
bly,  which  latter  was  abolished  as  to  said  officers  by  the  act  of  Juno 
20,  1874,  and  steps  thereby  taken  for  establishing  a  new  form,  witi 
better  defined  rights,  powers,  and  relations  to  the  Federal  Gov^si 
raent.  Exactly  what  this  new  form  of  government  will  be  remains 
to  be  determined  by  the  future  action  of  Congress. 

Each  of  these  governments  while  in  existence  incurred  obligations 
and  created  debts  which  are  described  in  the  following  pages,  all  of 
which  it  is  supposed  Congress  will  provide  for  as  it  has  by  the  act 
of  June  20,  1874,  for  the  floating  debt  of  some  eight  million  dollars. 

These  considerations  make  it  proper,  in  any  description  of  the 
debts  of  the  United  States,  to  include  also  those  of  the  District  of 
Columbia,  as  the  Pacific  railroad  bonds  are  included.  (See  page  31.) 


DEBTS  OF  THE  DISTRICT  OF  COLUMBIA. 


175 


Bonded  debt  of  the  District  of  Columbia,  including  the  cities  of  Washington 
and  Georgetown,  July,  1874. 


Description. 

Amount. 

Rate  of 
interest. 

When  payable. 

1 

2 
3 

4 

5 
6 

7 

DISTRICT  OF  COLUMBIA. 

Permanent  improvement,  (sixes)  
Permanent  improvement,  or  eight 
een  years  bonds,  (sevens)  
Permanent  improvement,  or   eight 
een  years  bonds,  (sevens)  
Water  stock  bonds  of  1871  
Water  stock  bonds  of  1873  
Market  stock  bonds  
Chicago  relief  bonds  

$4,000,000  00 
260,000  00 

530,000  00 
450,000  00 
35,000  00 
152,400  00 
100,000  00 

6  coin. 

7  curr. 

7  curr. 
7  curr. 
7  curr. 
7  curr. 
7  curr. 

July  1,  1891. 
July  1,  1891. 

July  1,  1891. 
October  1,  1901. 
October  1,  1903. 
July  26,  1892. 
Januarv  1    1877. 

8 
9 
10 

11 

Guaranteed  bonds,  (U.  S.,)  estimated. 
Funding  loan  bonds,  (Congress)  
Funding  loan  bonds.  (Legislature, 
ratified  by  Congress  June  20,  1874). 
County  school  bonds                       .  .. 

8,000,000  00 
1,150,000  00 

1,600,000  00 
18  700  00 

3i6oV 
6  com. 

6  coin. 
7  curr 

August  1,  1924. 
July  1,  1892. 

November  1,  1892. 
July    1     1874    '75 

12 
13 

Georgetown  steam  force-pump  bonds. 

CITY  OF  WASHINGTON. 

Five  per  cent,  stock  

8,500  00 
54,807  00 

7T3o  curr. 
5  curr. 

'76,  '77. 
March  1,  1879. 

At  pleasure. 

14 

685517  00 

6  curr 

At  pleasure 

15 
16 

Chesapeake  and  Ohio  Canal  stock.... 
Water  stock  

48,800  00 
96,560  00 

6  curr. 
6  curr. 

At  pleasure. 
At  pleasure. 

17 

18 

Ten  years  bonds,  or  Bowen  bonds... 
Three  years  certificates,  or  Emery 
bonds 

351,400  00 
6  850  00 

6  curr. 
7T-3?T  curr 

January  1,  1879. 

Matured 

19 

Five  years   certificates,  or    Emery 
bonds  .         

192450  00 

73  curr 

November  20  1875. 

20 

CITY  OF  GEORGETOWN. 

Six  per  cent,  general  stock  

182.885  00 

6  curr. 

At  pleasure. 

21 
22 

Eight  per  cent,  general  stock  
Six  per  cent,  bounty  stock  

20,000  00 
20,000  00 

8  curr. 
6  curr. 

July  1,  1881. 
September  24,  1884. 

23 

Six  per  cent,  market  stock.  

30,804  21 

6  curr. 

At  pleasure. 

24 

CERTIFICATES  PAYABLE  OUT  OF  SPE 
CIAL    ASSESSMENT    ON     PROPERTY 
BENEFITED. 

General    improvement   certificates, 
commonly   called   "greenbacks," 
about      

$17,994,673  21 
1  450  000  00 

8  curr. 

July   1,   1874,   '75, 

?5 

Water  certificates  

166  000  00 

8  curr. 

'76,  '77,'  78. 
July  1,  1877. 

26 

Sewer  certificates,  about  

1  100  000  00 

8  curr. 

July   1,   1874,  '75, 

'76,  '77,  '78. 

176  DEBTS  OF  THE  DISTRICT  OF  COLUMBIA. 

1. 

PERMANENT  IMPROVEMENT  BONDS,  (SIXES.) 

This  loan  of  four  million  dollars  was  authorized  by  acts  of  the 
Legislature,  July  10, 1871,  and  December  16, 1871.  The  bonds  bear 
date  December  20,  1871,  are  in  denominations  of  $50,  $100,  $500, 
$1,000,  and  are  payable  to  J.  &  W.  Seligman  &  Co,  or  bearer,  on  the 
first  day  of  July,  1891,  with  six  per  cent,  interest,  payable  semi- 
annually  in  gold  on  the  first  days  of  January  and  July  in  each  year 
at  the  First  National  Bank  of  New  York,  with  coupons  attached. 

The  act  of  the  Legislature  of  July  10,  1871,  under  which  these 
bonds  were  issued,  was  approved,  ratified,  and  confirmed  by  Con 
gress  by  act  of  May  8,  1872. 

The  loan  was  negotiated  in  Europe  and  most  of  the  bonds  are  still 
held  abroad. 

2  and  3. 

PERMANENT  IMPROVEMENT  BONDS,  (SEVENS,)  COMMONLY  CALLED  EIGH 
TEEN  YEARS  BONDS. 

These  bonds  were  issued  under  the  acts  of  the  Legislature  of  thp 
District,  June  23  and  June  25,  1873.  They  bear  date  July  1,  1873, 
are  in  denominations  of  $50, '$100,  $500,  and  $1,000,  and  are  payable 
to  J.  &  W.  Seligman  &  Co.,  or  bearer,  on  the  first  day  of  July,  1891, 
with  seven  per  cent,  interest,  payable  semi-annually  in  currency  on 
the  first  day  of  January  and  July  in  each  year  at  the  First  National 
Bank  of  New  York,  with  coupons  attached. 

4. 

WATER  STOCK  BONDS  or  1871. 

Issued  under  authority  of  an  act  of  the  District  Legislature,  July 
20,  1871,  "  in  order  to  provide  means  to  defray  the  expenses  of  com 
plying  with  the  injunctions  of  the  fourth  and  fifth  sections  of  the  act 
of  Congress  of  July  14,  1870."  The  bonds  are  all  coupon  bonds  of 
$1,000  each,  bear  date  October  1,  1871,  are  payable  to  bearer  on  the 
first  day  of  October,  1901,  with  interest  at  the  rate  of  seven  per  cent, 
per  annum  in  current  money  of  the  United  States,  on  the  first  days  of 
January  and  July  in  each  year  at  the  First  National  Bank  of  New  York. 


DEBTS  OF  THE  DISTRICT  OF  COLUMBIA.  177 

:  5. 

WATER  STOCK  BONDS  OF  1873. 

These  bonds,  issued  only  to  the  amount  of  thirty-five  thousand 
dollars  under  the  act  of  the  District  Legislature,  June  26,  1873,  are 
payable  in  currency,  and  are  in  all  respects  like  the  Water  Stock 
Bonds  of  1871,  previously  described,  (4,)  except  that  they  become 
payable  on  the  first  day  of  July,  1903.  The  interest  is  at  the  rate  of 
seven  per  cent,  per  annum,  payable  also  in  currency  semi-annually, 
on  same  days  and  at  same  place  as  the  Water  Stock  Bonds  of  1871. 
(No.  4.) 

6. 

MARKET  STOCK  BONDS. 

Issued  under  acts  of  the  District,  August  23,  1871,  and  June  19, 
1872.  The  bonds  are  of  denominations  of  $50,  §100,  $500,  and 
{jJljOOO^with  coupons  attached;  are  made  payable  to  bearer  on  the 
26th  of  July,  1892,  with  interest  at  the  rate  of  seven  per  cent,  per 
v.inum  in  current  money  of  the  United  States  at  some  convenient 
)lace  in  the  city  of  Washington.  They  bear  date  July  26,  1872. 

7. 
CHICAGO  RELIEF  BONDS. 

Authorized  by  act  of  District  Legislature,  October  8,  1872.  They 
Dear  date  of  January  1,  1873,  are  all  coupon  bonds  of  $1,000  each, 
and  are  payable  to  bearer  in  five  years  from  date,  (January  1,  1877,) 
with  interest  at  seven  "per  cent,  per  annum  in  currency,  payable  semi- 
aunually.  The  amount  issued  and  still  outstanding  is  one  hundred 
thousand  dollars. 

8. 
GUARANTEED  BONDS. 

These  bonds  are  issued  or  to  be  issued  by  the  sinking  fund  com 
missioners  under  an  act  of  Congress,  June  20, 1874,  for  the  purpose  of 
12 


17&  DEBTS  OF  THE  DISTRICT  OF  COLUMBIA. 

funding  the  floating  debts  of  the  District,  including  the  sewer  certifi 
cates,  sewer  taxes  paid,  certificates  of  the  Auditor  of  Board  of  Public 
Works,  certificates  of  the  Auditor  and  Comptroller  of  the  District, 
unliquidated  claims,  and  claims  for  private  property  taken,  and  for 
damage  to  property  sustained  by  reason  of  public  improvement  and 
repairs.  These  claims  are  to  be  determined  by  an  auditing  board, 
composed  of  the  First  and  Second  Comptroller  of  the  Treasury,  and 
the  amount  cannot  be  ascertained  until  their  report  is  made.  It  is 
estimated  that  the  amount  will  not  be  far  from  eight  million  dollars. 

The  bonds  are  to  be  in  denominations  of  $50  and  §500,  to  bear 
date  August  1,  1874,  and  made  payable  in  fifty  years  from  date  with 
interest  at  the  rate  of  three  and  sixty-five  one  hundredths  per  cent, 
per  annum,  payable  semi-annually.  The  interest  is  payable  in  cur 
rency.  The  bonds  are  by  said  act  of  Congress  exempt  from  taxation 
by  Federal,  State,  or  municipal  authority.  And  the  faith  of  the 
United  States  is  pledged  that  the  United  States  will,  by  proper  pro 
portion  of  appropriations,  and  by  causing  to  be  levied  upon  the  prop 
erty  within  the  District  such  taxes  as  will  provide  the  resources 
necessary  to  pay  the  interest  on  said  bonds  as  the  same  may  become 
due  and  payable,  and  create  a  sinking  fund  for  the  payment  of  the 
principal  thereof  at  maturity. 

They  are  called  guaranteed  bonds,  because  the  faith  of  the  United 
States  is  pledged  for  their  payment. 

9. 

FUNDING  LOAN  BONDS,  (ACT  OF  CONGRESS.) 

These  bonds  are  issued  by  the  Sinking  Fund  Commissioners  under 
the  acts  of  Congress,  June  1,  1871,  and  May  8, 1872,  for  the  purpose 
of  funding  certain  liabilities  of  the  city  of  Washington,  the  govern 
ment  of  which  was  abolished  upon  the  establishment  of  the  govern 
ment  of  the  District.  The  bonds  are  in  denominations  of  §50,  §100, 
§500,  and  §1,000,  bear  date  July  1,  1872,  and  are  payable  to  J.  &  W. 
Seligman  &  Co.,  or  bearer,  on  the  first  day  of  July,  1892,  with  six 
per  cent,  interest,  payable  semi-annually  in  gold  on  the  first  days  of 
January  and  July  in  each  year  at  the  First  National  Bank  of  the 
city  of  New  York,  with  coupons  attached.  They  contain  the  obli- 


DEBTS  OF  THE  DISTRICT  OF  COLUMBIA.  179 

gallon  of  the  District  of  Columbia  "for  and  in  behalf  of  the  city  of 
Washington,"  for  the  payment  of  both  principal  and  interest. 


10. 
FUNDING  LOAN  BONDS,  (ACT  OF  LEGISLATURE.) 

These  bonds  are  issued  for  the  same  purpose  as  those  described 
above,  (9,)  to  fund  certain  liabilities  of  the  city  of  Washington,  under 
an  act  of  the  District  Legislature,  June  20,  1872,  which  has  been  rati 
fied  and  confirmed  by  act  of  Congress,  June  20,  1874.  They  contain  the 
obligation  of  the  District,  for  and  in  behalf  of  the  city  of  Washing 
ton,  for  the  payment  of  the  same,  principal  and  interest. 

The  bonds  are  in  denominations  of  $50,  $100,  $500,  and  §1,000, 
bearing  date  November  1,  1872,  and  are  payable  to  bearer  in  thirty 
years  from  date,  (November  1,  1902,)  with  six  per  cent,  interest 
thereon  in  coin,  semi-aunually,  on  the  first  days  of  May  and  Novem 
ber  in  each  year.  Coupons  attached. 

The  act  of  Congress  ratifying  the  issue  of  these  bonds  provides 
that  none  of  them  unsold  shall  be  negotiated  at  less  than  par. 

11 

COUNTY  SCHOOL  BONDS. 

Issued  under  an  act  of  the  District  Legislature,  June  26,  1873. 
The  bonds  express  the  obligation  of  the  District  for  and  on  behalf  of 
the  county  of  Washington,  are  payable  to  bearer  on  the  first  day  of 
July,  in  different  years,  1874,  1875,  1876,  1877,  with  seven  per  cent, 
interest,  payable  semi-annually,  on  the  first  days  of  January  and  July, 
in  each  year,  at  the  National  Metropolitan  Bank,  in  the  city  of  Wash 
ington.  Coupons  attached. 

12. 

GEORGETOWN  STEAM  FORCE  PUMP  BONDS. 

Issued  under  act  of  District  Legislature,  June  26,  1873.  These 
bonds  contains  the  obligation  of  the  District  for  and  in  behalf  of 


180  DEBTS  OF  THE  DISTRICT  OF  COLUMBIA. 

Georgetown,  are  payable  to  bearer  on  the  first  day  of  March,  1879, 
with  seven  and  three-tenths  per  cent,  interest,  payable  semi-annually 
on  the  first  days  of  January  and  July,  in  each  year,  at  the  National 
Metropolitan  Bank,  in  the  city  of  Washington.  They  are  each  of 
the  denomination  of  $500,  and  have  semi-annual  coupons  attached. 
The  interest  is  paid  in  currency. 

13. 

CITY  OP  WASHINGTON  FIVE  PER  CENT  STOCK. 

Issued  by  the  Mayor,  Board  of  Aldermen,  and  Board  of  Common 
Council  of  the  city  of  Washington,  under  act  of  City  Council,  Au 
gust  10,  1828.  This  is  in  certificates,  acknowledging  the  indebted 
ness  of  the  city  to  persons  named  therein,  or  assigns,  in  any  sums 
not  less  than  ten  dollars,  as  the  holders  desire  to  have  their  stock 
divided,  bearing  interest  at  the  rate  of  five  per  cent,  per  annum, 
payable  quarter-yearly. 

The  interest  is  paid  in  currency  on  the  first  days  of  January,  April, 
July,  and  October,  in  each  year. 

The  certificates  are  transferable  only  on  the  books  of  the  District 
Comptroller  in  such  amounts  not  less  than  ten  dollars  as  the  holders 
may  desire. 

This  stock  is  redeemable  at  the  pleasure  of  the  Corporation,  now 
the  District,  after  ten  years  (now  expired)  from  its  issue,  and  by  act 
of  the  City  Council  of  March  10,  1842,  is  convertible  into  six  per  cent. 
stock,  at  the  rate  of  one  hundred  dollars  for  eighty-three  and  one- 
third  dollars  of  the  six  per  cent,  stock,  described  hereinafter  under 
J^o.  14. 

14. 

WASHINGTON  Six  PER  CENT.  STOCK. 

Issued  by  the  Mayor,  Board  of  Aldermen,  and  Board  of  Common 
Council  of  the  city  of  Washington,  under  an  act  of  City  Council, 
October  25,  1843. 

This  stock  is  in  certificates  acknowledging  the  indebtedness  of 
the  city  to  persons  named  therein,  or  assigns,  in  any  sums  the  hold- 


DEBTS  OF  THE  DISTRICT  OF  COLUMBIA.  181 

era  may  desire  to  have  their  stock  divided,  bearing  interest  at  six 
per  cent,  per  annum,  payable  quarter-yearly. 

The  interest  is  paid  in  currency  on  the  first  days  of  January, 
April,  July,  and  October  in  each  year. 

The  certificates  are  transferable  only  on  the  books  of  the  District 
Comptroller,  in  such  amounts  as  the  holders  desire. 

^Redeemable  at  the  pleasure  of  the  corporation,  now  the  District 
of  Columbia. 

15. 

CHESAPEAKE  AND  OHIO  CANAL  STOCK. 

Issued  by  the  Mayor,  Board  of  Aldermen,  and  Board  of  Common 
Council  of  the  city  of  Washington,  under  act  of  the  Council,  July 
14,  1847,  in  aid  of  the  Chesapeake  and  Ohio  canal. 

This  stock  is  in  certificates  acknowledging  the  indebtedness  of 
the  city  to  persons  named  therein,  or  assigns,  in  any  sums  the  hold 
ers  may  desire  to  have  their  stock  divided,  bearing  interest  at  six 
per  cent,  per  annum,  payable  half-yearly. 

The  interest  is  paid  in  currency  on  the  first  days  of  January  and 
July  in  each  year. 

The  certificates  are  transferable  only  on  the  books  of  the  District 
Register,  in  such  amounts  as  the  holders  desire. 

Redeemable  at  the  pleasure  of  the  corporation,  now  the  District 
of  Columbia. 

The  city  owned  and  held,  and  .the  District  now  holds,  coupon 
bonds  of  the  Chesapeake  and  Ohio  Canal  Company  to  an  amount 
greater  than  the  whole  amount  of  this  stock,  and  those  bonds  are  in 
the  hands  of  the  Sinking  Fund  Commissioners,  who  collect  the  in 
terest  thereon. 

16. 
WASHINGTON  WATER  STOCK. 

Issued  by  the  Mayor,  Board  of  Aldermen,  and  Board  of  Common 
Council  of  the  city  of  Washington,  under  act  of  the  City  Council, 
June  2,  1859. 

This  stock  is  in  certificates  acknowledging  the  indebtedness  of 


182  DEBTS  OF  THE  DISTKICT  OF  COLUMBIA. 

the  city  to  persons  named  therein,  or  assigns,  in  any  sum  the  hold 
ers  may  desire  to  have  their  stock  divided,  bearing  interest  at  six 
per  cent,  per  annum,  payable  quarter-yearly. 

The  interest  is  paid  in  currency  in  January,  April,  July,  and  Octo 
ber  in  each  year. 

The  certificates  are  transferable  only  on  the  books  of  the  District 
Comptroller,  in  such  amounts  as  the  holders  desire. 

Redeemable  or  payable  at  the  pleasure  of  the  corporation  of 
Washington  within  a  period  of  ten  years  [now  expired]  "from  the 
date  of  the  issue  thereof." 

17.  • 

TEN  YEARS  BONDS,  COMMONLY  CALLED  "  BOWEN  BONDS." 

Issued  by  the  city  of  Washington,  under  act  of  Congress  of  July 
27,  1868,  and  an  ordinance  of  the  city  of  Washington. 

The  bonds  are  in  denominations  of  $50,  $100,  $500,  and  $1,000, 
and  certify  that  the  city  of  Washington  is  indebted  to  the  bearer  in 
the  sum  named,  redeemable  in  ten  years  from  January  1, 1869,  with 
six  per  cent,  interest,  payable  semi-annually,  on  the  surrender  of 
the  matured  coupons;  the  principal  and  interest  payable  in  lawful 
money  of  the  United  States.  The  interest  is  payable  on  the  first 
days  of  January  and  July  in  each  year.  They  are  more  commonly 
called  "Bowen  bonds,"  as  they  were  issued  while  Hon.  8.  J.  Bowen 
was  mayor  of  the  city. 

The  bonds  have  on  the  back  a  printed  indorsement  that  they  are 
payable  January,  1880,  which  is  an  error.  They  are  payable  Janu 
ary,  1879. 

18. 
THREE  YEARS  CERTIFICATES,  OR  "EMERY  BONDS." 

Issued  in  accordance  with  an  act  of  Congress  of  July  7,  1870. 
They  bear  date  July  30,  1870,  and  certify  that  the  corporation  of 
Washington  is  indebted  unto  the  bearer  in  the  sum  of  fifty  dollars, 
payable  in  three  years  after  date,  with  7,30  per  cent,  interest,  paya 
ble  semi-annually  in  lawful  money,  with  semi-annual  coupons  at- 


DEBTS  OF  THE  DISTRICT  OF  COLUMBIA.  183 

tached,  which  become  payable  January  30  and  July  30  in  each  year. 
All  of  the  denomination  of  $50. 

They  are  commonly  called  "  Emery  three-years  bonds,"  because 
issued  while  Hon.  M.  G.  Emery  was  mayor  of  the  city. 


19. 

FIVE  YEARS  CERTIFICATES,  OR  "EMERY  BONDS." 

Issued  in  accordance  with  an  act  of  Congress,  July  15, 1870.  They 
bear  date  Nov.  20, 1870,  each  of  the  denomination  of  $50,  and  certify 
that  the  corporation  of  Washington  is  indebted  unto  the  bearer  in  the 
sum  of  fifty  dollars,  payable  five  years  after  date  with  7,30  per  cent, 
interest,  payable  semi-annually  in  lawful  money. 

Coupons  attached  payable  May  20  and  Nov.  20  in  each  year. 

Principal  becomes  payable  Nov.  20,  1875. 

Commonly  called  "Emery  five  years  bonds,"  because  issued 
while  Hon.  M.  G.  Emery  was  mayor  of  the  City. 

20. 
GEORGETOWN  Six  PER  CENT.  GENERAL  STOCK. 

Issued  by  the  corporation  of  Georgetown,  under  an  act  of  the  City 
Council. 

The  stock  is  in  certificates  acknowledging  the  indebtedness  of  the 
corporation  to  the  persons  named  therein,  or  assigns,  in  any  sums 
the  holders  may  desire  to  have  their  stock  divided,  bearing  six  per 
cent,  interest  per  annum,  payable  quarter-yearly. 

The  interest  is  payable  in  currency  on  the  first  days  of  January, 
April,  July,  and  October  in  each  year. 

The  certificates  are  u  transferable  only  by  appearance  in  person,  or 
by  attorney,  at  the  office  of  the  Register  (now  Comptroller)  of  the 
District  of  Columbia,  where  the  debt  is  recorded." 

No  time  is  specified  for  the  payment  of  the  principal,  and  it  is  re 
garded  as  payable  at  the  pleasure  of  the  corporation,  now  by  the 
District  of  Columbia. 


184  DEBTS  OF  THE  DISTRICT  OF  COLUMBIA. 

21. 

GEORGETOWN  EIGHT  PER  CENT.  GENERAL  STOCK. 

Issued  by  the  corporation  of  Georgetown,  under  an  act  of  the 
City  Council. 

The  stock  is  in  certificates  acknowledging  the  indebtedness  of  the 
corporation  to  the  persons  named  therein,  or  assigns,  in  any  sums 
the  holders  may  desire  to  have  their  stock  divided,  payable  on  the 
first  day  of  July,  1881,  bearing  interest  at  eight  per  cent,  per  annum, 
payable  quarter-yearly,  on  the  first  days  each  of  January,  April,  Julys 
and  October. 

The  interest  is  paid  in  currency. 

"  Transferable  only  by  appearance  in  person,  or  by  attorney,  at 
the  office  of  the  Register  (now  Comptroller)  of  the  District  of  Colum 
bia,  where  the  debt  is  recorded." 

22. 
GEORGETOWN  Six  PER  CENT  BOUNTY  STOCK. 

Issued  by  the  corporation  of  Georgetown,  under  an  ordinance  of 
the  City  Council,  Sept.  24,  1864. 

The  stock  is  in  certificates  acknowledging  the  indebtedness  of  the 
corporation  to  the  person  named  therein,  or  assigns,  in  any  sums  the 
holders  desire  to  have  their  stock  divided,  redeemable  after  five 
years  from  the  date  of  the  act,  at  the  pleasure  of  the  corporation,  and 
pa}?able  in  twenty  years,  (Sept.  24,  1884,)  bearing  interest  at  the  rate 
of  six  per  cent,  per  annum,  payable  quarter-yearly. 

The  interest  is  paid  in  currency. 

"  Transfer  able  at  the  office  of  the  clerk  of  said  corporation,"  (now 
the  District  Comptroller,)  "by  the  holders  thereof,  in  person  or  by 
attorney." 

23. 

GEORGETOWN  Six  PER  CENT.  MARKET  STOCK. 

Issued  by  the  corporation  of  Georgetown,  under  an  act  of  the 
City  Council,  January  9,  1864. 


DEBTS  OF  THE  DISTRICT  OF  COLUMBIA.  185 

The  stock  is  in  certificates,  acknowledging  the  indebtedness  of  the 
corporation  to  the  persons  therein  named,  or  assigns,  in  any  sums 
the  holders  desire  to  have  their  stock  divided,  with  interest  at  the 
rate  of  six  per  cent,  per  annum,  payable  quarter-yearly. 

The  interest  is  paid  in  currency  on  the  first  days  of  January,  April, 
July,  and  October  in  each  year. 

The  principal  is  payable  at  the  pleasure  of  the  corporation,  now 
by  the  District  of  Columbia. 

"Transferable  only  by  appearance  in  person,  or  by  attorney,  at 
the  office  of  the  Register  (now  Comptroller)  of  the  District  of  Colum 
bia,  where  the  debt  is  recorded." 

24. 

GENERAL  IMPROVEMENT  CERTIFICATES,  COMMONLY  CALLED  "  GREEN 
BACKS." 

These  certificates  bear  date  July  1,  1873,  and  are  payable  in  one, 
two,  three,  four,  and  five  years.  They  certify  that  for  work  done 
under  direction  of  the  Board  of  Public  Works,  and  chargeable  to 
the  private  property  adjoining  and  benefited  thereby,  there  is  due 
to  the  bearer  fifty  dollars,  payable  July  1,  1874,  (or  75,  '76,  '77,  or 
'78,)  with  eight  per  centum  interest,  payable  semi-annually,  as  per 
coupons  attached.  "  Issued  in  accordance  with  act  of  Legislative 
Assembly,  secured  by  pledge  to  the  Commissioners  of  the  Sinking 
Fund  of  assessments  made  in  accordance  with  act  of  Congress  against 
private  property  benefited  by  improvements,  and  receivable  in  pay 
ment  of  such  assessments." 

They  are  receivable  for  taxes  for  improvements  on  property  bene 
fited  thereby;  but  for  the  portion  of  such  taxes  which  are  payable  in 
any  year  only  the  certificates  maturing  that  year  are  received. 

25. 
WATER  CERTIFICATES. 

These  certificates  bear  date  July  1,  1873,  and  certify  that  there  is 
due  the  bearer,  four  years  from  date,  in  denominations  of  $50,  $100, 
and  §500,  with  eight  per  cent,  interest,  payable  at  Washington,  D.  C., 


186  DEBTS  OF  THE  DISTRICT  OF  COLUMBIA. 

on  the  first  days  of  January  and  July  of  each  year  in  current  money 
of  the  United  States.  "  This  certificate  is  based  on  assessments  for 
laying  water-mains  in  the  city  of  "Washington  to  the  amount  of 
§166,678  37,  and  is  issued  agreeably  to  an  act  of  the  Legislative 
Assembly  of  the  District  of  Columbia,  entitled  'An  act  authorizing 
the  Commissioners  of  the  Sinking  Fund  to  issue  certificates  to  pay 
for  laying  water-mains,  and  providing  for  the  assessment  of  water- 
mains  and  fire-plugs,'  approved  June  23, 1873,  which  makes  the  cer 
tificates  liens  on  the  property  assessed  for  laying  water-mains." 

26. 
SEWER  CERTIFICATES. 

Issued  under  act  of  District  Legislature  of  June  26,  1873.  The 
certificates,  in  denominations  of  $50,  $100,  and  $500,  certify  for 
work  done  under  direction  of  the  Board  of  Public  Works,  and 
chargeable  to  the  private  property  adjoining  and  benefited  thereby, 
there"  is  due  to  the  bearer  the  sum  named,  payable  July  1,  (different 
years,  1874,  '75,  '76,  '77,  and  '78,)  with  eight  per  cent,  interest,  pay 
able  semi-annually,  as  per  coupons  attached.  Interest  payable  in 
currency. 

By  the  act  of  Congress,  June  20,  1874,  the  tax  by  which  these 
certificates  were  secured  was  abated,  and  the  Sinking  Fund  Commis 
sioners  were  authorized  to  issue  the  new  guaranteed  bonds,  bearing 
interest  at  3-j6^,  (see  'No.  8,)  to  holders  of  these  certificates  in  lieu 
thereof.  No  other  provision  is  made  for  their  redemption. 

In  estimating  the  amount  of  the  3T6/Q-  guaranteed  bonds,  as  set 
down  in  the  table  at  the  head  of  this  chapter,  eight  million  dollars, 
the  whole  amount  of  these  bonds,  is  included. 


INDEX. 


NOTE.— Everything  relating  to  national  banking  associations  is  indexed  alphabetically  under  the 
head  of  "  NATIONAL  BANKS." 


PAGE, 
A. 

ACT  TO  STRENGTHEN  THE  PUBLIC  CREDIT 81 

ANTICIPATING  payment  of  interest  on  coupon  bonds  and  registered  stock 71 

APPROPRIATION  for  expenses  of  refunding  loans,  under  the  funding  acts 9 

APPORTIONMENT  OF  BANK  NOTE  CIRCULATION.  (See   National 

Banks.} 114,  153,  155 

ASSIGNMENT  of  registered  stock : 

By  whom  made,  form,  and  execution  of 57,  58 

In  foreign  countries 57,  50 

B. 

BALANCES  OF  OLD  LOANS.     (See  Monthly  Debt,  Statement^ 25,  78,  79 

BANKS  AND  BANKING  ASSOCIATIONS: 

NATIONAL.     (See  National  Banks.} 100-159 

STATE,  observations  concerning;  number  formerly  existing 99,  100 

conversion  of,  into  national  banks 129,  145-147 

tax  on  deposits  and  capital 142,  158,  159 

on  notes  of,  in  circulation 145,  146 

returns  required  from,  as  a  basis  of  taxation 143 

decisions  relating  to,  cited 86,  126,  127,  129,  134,  145,  146 

for  savings,  how  taxed 86,  144,  159 

BONDS: 

Amounts  of  outstanding 7,  25,  32 

Called  in  for  redemption 19,  20 

Authority  for  calling  in,  for  redemption 18,  76 

Distinctive  features  of  registered  and  coupon 55,  64 

Registered,  lost  or  destroyed,  immediate  notice  of,  should  be  given 60,  62 

duplicates  of,  authority  for,  and  how  obtained 61,  62 

interest  on,  where  payable  and  how 69,  70 

transfer  of,  by  assignment 57,  59 

Coupon,  precautions  to  be  observed  concerning , 66 

duplicates  of,  when  issued,  how  obtained 66-68 

exchange  or  conversion  of 8,  68 

interest  on,  where  payable 70 

transfer  of,  by  delivery,  before  and  after  maturity 64 

Payment  of  interest  on,  may  be  anticipated 71 

187 


188  INDEX. 

PAGB. 

BON  D'J — Contin  ued  : 

Purchase  of,  oy  Secretary  of  the  Treasury 72,  82 

method  of  proceeding  and  regulations  concerning 73,  74 

for  the  sinking  fund 82,  83 

Purchased  for  the  sinking  fund,  are  canceled  and  destroyed 83,  84 

Payment  and  redemption  of. , • Y5-77 

|  Distinction  between  "redeemable"  and  "payable" 75 

Principal  of,  where  and  how  paid 76 

and  interest,  obligation  to  pay  in  coin 79-82 

Taxation  of,  by  Federal  and  State  authority 85-87,  126,  127 

Deposit  of,  by  national  banking  associations 110,  112,  110 

BONDS,  ETC.,  PAYABLE  IN  COIN: 

Schedule  of 7 

Funded  loans 8-12 

Consols,  or  5- 20s  of  1865,  1867,  and  1868 12 

Five-twenties  of  1865 13 

June,  1864 , 14 

March,  1864,  (all  registered.} 15 

1862 17-20 

Ten-forties 15 

Loan  of  1863,  or  sixes  of  1881 16 

July  and  August,  1861,  or  sixes  of  1881 20 

February,  1861,  or  sixes  of  1881 22 

1858,  or  fives  of  1874 23 

Oregon  war  debt 21 

Balances  of  old  loans 25,  79 

Gold  certificates 20 

United  States  notes ...„ 35-43 

Old  demand  notes .-•    , 43 

BONDS,  ETC.,  PAYABLE  IN  CURRENCY: 

(See  Certificates,  Debt  of  the  United  States,  Na*uy  Pension  Fund,  Pacific  Railway  Bonds, 
Fractional  Currency?) 


CALLING  IN  BONDS  FOR  REDEMPTION: 

Other  than  those  of  funded  loan,  order  of 18,  76 

Of  the  funded  loans,  order  of 9,  77 

CANCELLATION: 

Of  five-twenty  bonds 18,  76,  111 

Of  early  series  of  gold  notes 27 

Of  three  per  cent,  certificates • 29 

Of  notes  exchanged  for  legal  tenders 37,  38 

Of  legal  tenders  under  act  of  April  12,  1866 39 

issued  prior  to  1869 43,  50 

Of  old  demand  notes 44 

Of  defaced  notes  and  fractional  currency 49,  50 

Of  fragmentary  notes  50,  51 

Of  bonds  purchased  for  sinking  fund 83,  84 

deposited  by  national  banks Ill,  132,  133 


INDEX.  189 

PAGE. 
CAVEAT: 

Form  of,  to  be  filed  on  loss  of  registered  stock 62 

Effect  of,  when  coupon  bonds  are  lost 66 

CERTIFICATES: 

Of  organization  of  banks.     (See  National  Banks.} 103,  111 

Gold  certificates  ;  limitation  and  uses  of,  etc •...  26,  27 

Certificates  of  deposit  of  U.  S.  notes,  do 27,  28 

Three  per  cent,  or  temporary  loan  certificates 28,  153 

payable  in  lawful  money 28 

process  of  redemption  of,  do 29 

Issued  to  E.  and  N.  A.  Railway  Co.  of  Maine,  known  as  certificates  of  indebted 
ness  of  1870 30 

payable  in  lawful  money.... 31 

Of  stock,  or  registered  bonds 55-57 

CLOSING  TRANSFER  BOOKS  of  registered  stock,  dates  of 56,  57 

effect  of  on  payment  of,  interest 57 

COIN: 

Reserve  in  Treasury;  general  objects  of 72,  82 

To  be  used  in  redeeming  five-twenty  bonds 76 

purchasing  bonds  for  the  sinking  fund 82,  83 

What  bonds  are  payable  in 79-82 

Sale  of,    (See  Sales  of  Gold.} -. 72-75 

COMPTROLLER  OF  THE  CURRENCY.    (See  National  Banks.} 101,  102 

CONSOLS: 

Origin  of  the  term;  description  of  bonds;  when  payable,  etc 12,13 

Otherwise  known  as  five-twenties  of  1865,  of  1867,  and  of  1868 12,  ]3 

COUPONS: 

May  be  detached  and  pass  by  delivery;  decisions  of  courts  respecting 65 

Where  collectable;  advance  payments  of 70,  71 

Of  bonds  called  in  for  redemption — fractional  payments 76,  77 

COUPON  BONDS: 

Pass  by  delivery;  decisions  of  courts  respecting  title 64,  65 

Precautions  to  be  observed  by  holders;  advantages  gained  thereby  in  case  of  loss...  66 

Duplicates  of,  when  defaced  or  destroyed 66,  67 

when  mutilated  or  indorsed 68 

regulations  for  obtaining 61-64 

no  provision  for,  in  case  of  loss 67 

Conversion  of,  into  registered  stock 68,  11] 

CONSTITUTIONALITY : 

Of  the  legal-tender  acts 41 

Of  the  law  taxing  notes  of  State  banks,  &c 145 

CURRENCY,  the  introduction  of,  &c 44-47,  99 

(See  United  States  Notes,  Fractional  Currency,  National  Banks.} 

CURRENCY  BUREAU,  act  establishing.     (See  National  Banks} 101 

CURRENCY  SIXES.     (See  Pacific  Railway  Bonds} 31 

D. 
DEBT  OF  THE  UNITED  STATES: 

Bearing  interest  and  payable  in  coin.    (See  Bonds,  etc.,  Payable  in  t/oin.)  7-24,  79-82 


190  INDEX. 

PAOB. 
DEBT  OF  THE  UNITED  STATES—  Continued- 

Bearing  interest  and  payable  in  lawful  money,  VIB  : 

Three  per  cent,  or  temporary  loan  certificates 28 

Navy  pension  fund 29 

Certificates  of  indebtedness  of  1870 30 

Pacific  railway  bonds 31 

Bearing  no  interest  and  payable  in  coin,  viz : 

Balances  of  loans  contracted  prior  to  February  25,  1862 25,  79 

Gold  certificates 26 

United  States  notes 35 

Old  demand  notes 43 

Bearing  no  interest,  and  payable  in  lawful  money,  viz: 

Certificates  of  deposit 27 

Fractional  currency 44 

Highest  point  reached  in , 92 

Reduction  of,  up  to  September  1,  1872 93 

Not  to  be  increased  by  virtue  of  any  existing  law 9 

General  statement  of  loans  from  the  earliest  period 93-96 

Monthly  statement  of 77,  78 

DEFACED  OR  DESTROYED  BONDS: 

Duplicates  may  be  obtained  in  lieu  of •-••  60-63,  66-68 

except  of  classes  called  in  for  redemption 67 

DEFACED  AND  MUTILATED  CURRENCY 49-54 

(See  United  States  Notes,  Fractional  Currency.) 
DISTINCTIVE  PAPER: 

Exclusively  used  for  bonds  and  other  obligations  of  the  United  States 4S 

Peculiarities  of;  circular  respecting 48 

Unauthorized  possession  of,  a  penal  offense;  penalties  incurred 48 

E. 

EXTINGUISHMENT  OF  THE  PUBLIC  DEBT: 

By  operation  of  the  sinking  fund 82-85,  93 

An  established  feature  of  national  policy 88 

Extracts  from  messages  of  Presidents  recommending  the 88-91 

In  1835,  celebration  on  account  of. 91 

Distribution  of  surplus  revenue  after,  in  1837 92 

Rates  of  premium  paid  for  purposes  of. 92 

F. 

FOUR  PER  CENT.  BONDS.    (See  Funded  Loans.) 9,  11 

FOUR-AND-A-HALF  PER  CENT.  BONDS.    (See  Funded  Loans.) 9,  10 

FIVE  PER  CENT.  BONDS: 

Of  1874,  description  of  the  loan 23 

oldest  outstanding  loan  not  called  in  for  redemption 24 

Of  1881.     (See  Funded  Loans.) 10 

Of  1904.     (See  Ten-forties.) 15,  16 

FIVE-TWENTY  BONDS: 

Of  1865,  description  of. 13,  14 

Of  1865,  1867,  and  1868,  or  Consols....  12,  13 


INDEX.  191 

PA  OB. 
FIV  E-TWENTY  BONDS—  Continued: 

Of  Juno,  1864,  description  of 1-1 

Of  March,  1864,  description  of 15 

Of  1862,  description  of. 17 

origin  of  the  loan  ;  description  of  series 17,  18 

list  of,  called  in  for  redemption 19,  20 

FRACTIONAL  CURRENCY: 

0 rigin  and  necessity  of 44 

Acts  of  Congress  authorizing 45,  46 

First  issued  as  "postage  currency." 46 

General  description  and  characteristics  of. 47 

Limited  to  fifty  millions 47 

Amount  required  for  circulation 47 

Mutilated  or  defaced,  regulations  for  redemption  of 49-52 

Old,  defaced  and  mutilated,  may  be  exchanged  for  new 53 

FUNDED  LOANS: 

Acts  of  authorization 8-10 

Description  of  loans  and  bonds 10-12 

Bonds  of,  wholly  exempt  from  taxation : 9,  11,  87 

principal  and  interest  payable  in  coin 8,  11,  82 

may  be  either  registered  or  coupon 8 

how  exchanged  for  5-20's 9 

how  called  in  for  payment 9,  77 

amount  which  may  be  issued,  viz: 

$500,000,000  five  per  cents  of  1881 8,10 

$300,000,000  four-and-a-half  per  cents  of  1886 9 

$1,000,000,000  four  per  cents  of  1901 9 

but  not  exceeding,  in  all,  $1,500,000,000 10 

interest  on,  payable  quarterly 10,  11 

Interest  on  registered  bonds,  paid  by  check 69 

Expenses  of  negotiating,  &c.,  appropriation  for 9 

Only  loansnow  offered  by  the  Government 11 

Faith  of  the  United  States  pledged  by  act  of  Congress  to  payment  of,  in  coin 82 

G. 

GOLD.     (See  Coin,  Sales  of  Gold.} 72,  76,  82,  83 

GOLD  BANKS  AND  GOLD  NOTES.     (See  National  Banks.) 154 

GOLD  CERTIFICATES.     (See  Certificates.) 26 

GOVERNMENT: 

Its  necessities  and  powers,  observations  concerning 99 

Duty  of,  to  redeem  its  obligations  in  coin,  unless  otherwise  expressly  provided  in 

the  contract 40,  79,  81 

Faith  of  the  United  States  solemnly  pledged  to  such  redemption 81 

GREENBACKS: 

Origin  of  the  term.     (See  United  States  Notes.) 35 

H. 
HOLDERS  OF  GOVERNMENT  SECURITIES: 

l)ila',.ory  in  claiming  payment 25 

Precautions  to  be  observed  by. 60,  66 


192  INDEX. 

PAQB 

HOLDERS  OF  GOVERNMENT  SECURITIES— Continued: 

To  select  place  for  payment  of  interest  on  registered  stock 69 

Should  notify  Register  of  change  in  address 70 

I. 
INTEREST: 

When  payable  in  coin 79-82 

When  itceasestorun 9,  25,  74,  75,  76,  78, 154 

On  registered  bonds,  where  payable , 69 

transferred  after  books  are  closed,  to  whom  payable 57,  69 

of  funded  loans,  paid  by  check  sent  to  address  of  holders 69 

of  all  other  loans,  payable  at  designated  offices 69 

general  rules  concerning 69,  70 

disposition  of,  when  not  claimed  in  ninety  days 70 

On  coupon  bonds,  how  and  where  collectable 70,  71 

in  cases  of  called  bonds  or  detached  coupons 76,  77 

May  be  paid  before  maturity;  when  subject  to  rebate 71 

On  funded  loans,  exempt  from  taxation 87 

Collectioivof,  on  bonds  deposited  with  Treasurer  by  national  banks 117 

L. 

LEGAL-TENDER  NOTES:    (See  United  States  Notes.) 

Origin  of  the  term;  for  what  receivable 35 

For  what  they  are  not  receivable 42 

Constitutionality  of  the  laws  relating  to 41 

Dates  and  descriptions  of  issues 42,  43 

LIABILITY:     (See  National  Banks.} 

Of  stockholders  in  national  banks;  extent  and  enforcement  of 108,  134 

banking  associations ;  limitations  and  restrictions  affecting 123 

directors  and  other  officers  in  their  individual  capacity 136,  152 

executors,  trustees,  &c 142 

LIMITATION: 

No  statute  of,  against  matured  bonds 25 

LOANS: 

Outstanding,  not  matured,  payable  in  coin 7 

matured,  but  not  presented  for  payment 25 

Not  bearing  interest.     (See  Debt  of  the  United  States.) 25 

List  of,  from  1776  to  1872 93-96 

LOST  BONDS: 

If  registered,  notice  of  loss  to  be  given  Treasury  Department 60,  66 

may  be  duplicated 61 

Proceedings  for  obtaining  duplicates 62,  63 

Coupon  bonds  renewed  only  when  destroyed  or  defaced 66,  67 

How  such  renewals  are  obtained , 63,  68 

M. 

MONTHLY  DEBT  STATEMENT: 

Description  of. 77,  78 

Balances  cf  old  loans  included  in 78 

MUTILATED  CURRENCY.    (See  United  States  Notes ;  Fractional  Currency.) 49 


INDEX.  193 

PAGE. 

N. 
NATIONAL  BANKS: 

ACTS  OF  AUTHORIZATION 101-142 

amendatory  of  the  banking  laws 142-159 

ANNUAL  REPORT  OF  COMPTROLLER;  what  to  contain 140 

APPOINTMENT  OF  OFFICERS.     (See  Election.    Officers.} 105 

ARTICLES  OF  ASSOCIATION.     (See  Organization) 103 

ASSIGNMENT  of  depositor's  claim,  after  failure  of  bank  and  before  appointment  of 

receiver,  not  good  as  a  set-off  in  favor  of  a  debtor  of  the  bank 134 

BAD  DEBTS  defined;  to  be  deducted  from  net  profits  before  dividend 124 

BANKS  organized  as  national,  cannot  be  converted  into  State  banks 129 

designated  as  depositaries,  under  banking  laws,  are  public  depositaries 130 

BANKING  ASSOCIATIONS,  how  formed.     (See  Organization.) ]03,  104 

no  limit  to  number  of,  or  to  aggregate  amount  of  capital 103 

beyond  minimum  amount,  to  capital  of  each  bank 103 

must  deposit  bonds  whether  circulation  is  obtained  or  not 103 

sufficiency  of  proof  concerning  formation  of,  a  question  for  Comptrol 
ler 104,  109 

BANK  NOTE  PAPER.    (See  Counterfeiting.) 140 

BANK  RESERVES.     (See  Redemption  Agencies.     Reserves...) 120 

BANK  SHARES  may  be  constitutionally  taxed  by  State  authority;  rate  must  not 

exceed  that  imposed  on  State  banks 126, 127 

but  may  equal  the  highest  rate  imposed,  when  a  lower  rate  exists 

as  to  banks  specially  exempted 127 

BILLS  OF  EXCHANGE,  discount  of,  when  not  usurious 120 

BONDS,  registered  only, may  be  deposited  to  secure  circulation 103,  111 

may  be  issued  in  lieu  of  coupon  for  purposes  of  deposit Ill 

deposited,  amount  necessary  to  perfect  organization 110,  111 

always  to  equal  one-third  of  capital  stock  actually  paid  in Ill 

when  to  be  increased Ill 

not  to  be  diminished  below  requirements  of  act 118 

when  excess  may  be  taken  up Ill 

to  be  transferred  to  Treasurer  in  trust 112 

transfers  of,  by  Treasurer,  to  be  countersigned  and  recorded  by 

Comptroller 113 

to  be  examined  annually  and   compared  with   Comptroller's 

books,  &c.,  by  officers  or  agents  of  banks 116,  117' 

result  of  examination  to  be  certified  to  Treasurer  by  such  officers 

or  agents 117 

to  be  held  exclusively  as  security  for  redemption  of  notes ;  de 
preciation  in,  to  be  made  good 117' 

may  be  exchanged  for  other  United  States  bonds 117' 

returned  on  surrender  and  cancellation  of  circulating 

notes US' 

or  on  deposit  of  lawful  money 128.  157' 

cannot  be  retained  as  security  for  other  claims  of  the  United 

States 128; 

sale  of,  by  Comptroller,  for  purposes  of  redemption 133 

p  interest  on,  to  be  collected  by  the  banks 117' 


194  INDEX. 

PAGE. 
NATIONAL  BANKS—  Co?itinued: 

BUSINESS  OF  BANKING,  -when  it  may  be  commenced 112 

where  to  be  transacted 106 

certificate  authorizing  such  commencement  to  be  published  112 

when  it  may  be  withheld  by  Comptroller 109 

BY-LAWS  to  be  established  by  board  of  directors „, 106 

may,  subject  to  the  provisions  of  the  act,  regulate  the  transfer  of  stock, 

election  of  directors,  etc : 106 

CAPITAL  STOCK,  no  limit  to  amount  of 103 

amount  of,  required  on  organization 104 

to  be  divided  into  shares  of  $100 108 

fifty  per  cent,  to  bo  paid  in  before  commencing  business 109 

remainder,  how  and  when  to  be  paid 110 

to  be  deemed  personal  property 108 

mode  of  transfer  to  be  fixed  by  articles  or  by-laws 106,  108 

increase  of,  provisions  relating  to 109 

reduction  of,  how  effected;  limitation  of 109 

withdrawal  of,  while  bank  is  in  operation,  forbidden 124 

of  delinquent  shareholders,  when  and  how  to  be  sold 110 

not  realizing  amount  due  and  expenses,  forfeited 110 

if  not  sold  within  six  months,  to  be  canceled 110 

and  any  deficiency  in  capital  caused  thereby  to  bo 
made  good  in  thirty  days,  or  association   to  be 

wound  up 110 

regulations  for  payment  of  duty  on 162,  163 

CASHIER,  to  be  appointed  by  board  of  directors 105 

bank  responsible  for  his  acts 105 

limitations  of  responsibility,  when  not  effectual 105 

when  his  authority  may  bo  inferred 105 

to  give  security,  if  required  by  association 105 

may  certify  payment  of  installments  of  capital 110 

verify  final  statement  of  organization 112 

sign  memorandum  on  bonds  transferred  to  Treasurer 112 

to  keep  list  of  stockholders 125 

may  verify  reports,  returns,  &c 117,  126,  128,  150,  151 

may  waive  protest 131 

CERTIFYING  CHECKS,  unlawful,  unless  amount  certified  is  actually  on  deposit 151 

the  act  of,  by  competent  officers,  creates  a  valid  obligation  on 

part  of  bank  151 

contrary  to  law,  subjects  banks  to  proceedings  for  closing  up, 

under  section  50,  act  of  1864 151 

CHARLESTON,  when  to  be  added  to  list  of  cities  where  banks  may  hold  three -fifths 

of  lawful  money  reserve  of  associations  located  elsewhere 121 

CIRCUIT  COURTS  OF  UNITED  STATES,  have  no  jurisdiction  in  equity   to  restrain 

Treasurer  or  Comptroller  in  disposing  of  bonds  on  deposit 139 

CIRCULATION,  how  proportioned;  original  limit  of  total  issue  $300,000,000 114 

increase  of  $54,000,000  authorized;  how  distributed 29,  114,152 

of  currency  banks,  limited  to  $500,000  each 153 

of  gold  banks,  limited  to  $1,000,000  each 153 


INDEX.  195 

PAGE. 

NATIONAL  BANKS—  Continued: 
CIRCULATION — Continued: 

$25,000,000  of,  redistribution  of,  in  States  having  less   than  their 
proportion;  provisions  concerning.     (See  Comptroller.}..  114,155,150 

CIRCULATING  NOTES,  how  provided ;  denominations  and  form  of 115 

plates  and  dies  to  remain  in  charge  of  Comptroller 125 

when  to  be  furnished  for  use 113 

not  more  than  one-sixth  to  be  under  $5 115 

none  under  $5,  after  resumption  of  specie  payments 115 

must  be  signed  by  president  or  vice  president  and  by  cashier..  115 

and  payable  on  demand  at  place  ofbusinesas 115 

when  banks  may  issue;  for  what  they  are  receivable 115,  110 

none  other  than  those  specified  to  be  issued  by  banks 116 

or  furnished  by  government  officers,  under  penalty 

of  fine  and  imprisonment 118 

worn-out  or  mutilated,  to  be  replaced 116 

redemption  of,  how  secured.     (See  Reserves.) 113,  114 

provisions  relating  to,  53, 121, 122, 128, 132, 135, 156, 157 

of  banks  in  liquidation,  redeemed  by  treasurer 53,  128 

of  banks  in  ALBANY,  BALTIMORE,  BOSTON,  CHICAGO,  CINCIN 
NATI,  CLEVELAND,  DETROIT,  LOUISVILLE,  MILWAUKEE,  NEW 
ORLEANS,  NEW  YORK,  PHILADELPHIA,  PITTSBUGH,  SAINT 
Louis,  SAN  FRANCISCO,  and  WASHINGTON  CITY,  to  be  re 
deemed  at  NEW  YORK 121,  122 

of  banks  in  other  places,  to  be  redeemed  at  a  bank  in  either  of 

the  cities  named.     (See  Redemption  Agencies) 122 

of  each  bank  to  be  received  at  par  by  every  other  bank 122 

not  to  be  hypothecated  or  used  to  increase  capital  stock 124 

withholding  of,  from  use,  when  a  misdemeanor 149 

amount  of,  issued  under  act  of  July  12,  1870,  to  be  reported 

monthly  by  Comptroller 153 

COMPTROLLER  OF  THE  CURRENCY  -. 

How  appointed ;  tenure  of  office;  salary 101 

Oath  of  office;  bond 101,  102 

Not  to  be  interested  in  national  banks 102 

Duties  and  Functions  of: 

To  file  and  preserve  articles  of  association 103 

record  and  preserve  certificates  of  organization 104 

certify  documents  to  be  used  as  evidence 102,  104 

authorize  associations,  when  duly  organized,  to  commence  busi 
ness 105,  112,  130 

examine  and  determine  when  associations  are  entitled  to  such  author 
ization 112 

issue  his  official  certificate  for  that  purpose;  contents  of 112 

record  and  countersign  transfers  of  bonds  belonging  to  associations 1 13 

advise  the  parties  concerned  by  mail 11-'! 

deliver  to  associations  which  have  complied  with  the  law  their  quota 

of  circulating  notes 114 

furnish  gold  notes  to  associations  organized  as  gold  banks .   154 


196  INDEX. 

PAG*. 

NATIONAL  BANKS—  Continued: 

COMPTEOLLEE  OF  THE  CUEEENCY — Continued: 

Duties  and  Functions  of: 

To  supervise  the  engraving  of  plates  and  dies 115,  12? 

replace  worn-out,  mutilated,  and  lost  notes 116 

make  regulations  for  the  entry  or  record  of  such  notes 116 

authorize  associations  to  receive  interest  on  bonds 117 

require  associations  to  make  up  deficiency  in  case  of  depreciation  in 

market  value  of  bonds  deposited 117 

and  to  make  good  any  deficiency  in  lawful  money  reserve 121 

in  case  of  default,  to  proceed  to  close  up  the  association 121 

take  like  proceedings  in  case  of  failure  to  select  a  redemption 

agency,  or  to  redeem  circulating  notes  thereat 122 

suspend,  after  a  preliminary  examination,  banks  failing  to   redeem 

either  at  their  own  counters  or  at  redemption  agencies 131 

appoint  a  special  agent  to  make  an  immediate  further  examina 
tion 132 

in  case  of  insolvency,  and  within  thirty  days  after  notice  of  failure, 

to  declare  bonds  and  securities  in  pledge  forfeited 132 

and  thereupon  to  notify  holders  of  circulating  notes  to  present 

the  same  at  the  Treasury  for  payment 

cancel  or  sell  forfeited  bonds 132, 

and  appoint  a  receiver 133 

advertise  for  claims  against  the  association 135 

and  from  time  to  time,  after  providing  for  any  deficiency  in 
redeeming   circulation,  make  ratable  dividend    of  proceeds 

realized  by  receiver  from  assets  of  association ..   135 

institute  suit,  in  his  own  name,  for  forfeiture  of  banking  privileges, 

&c.,  in  case  of  wilful  violation  of  banking  laws  by  directors 136,  137 

institute  proceedings  for  winding  up,  in  case  of  improper  certification 

of  checks 151 

appoint  from  time  to  time,  with  approval  of  Secretary,  examiners  of 

banks 137 

make  an  annual  report  to  Congress ;  contents  of. 140,  141 

report  to  Secretary,  monthly,  amount  of  circulating  notes  issued  under 

the  act  of  July  12,  1870,  authorizing  increase 153 

take  steps  for  redistribution  of  circulating  notes  under  same  act 156 

give  preference  in  certain  cases  in  such  distribution 153 

make  requisition  on  banks  having  a  surplus  circulation  for  a  pro  rata 

return  thereof , 156 

in  case  of  non-compliance,  to  sell  bonds  of  defaulting  association  to  an 

e  qu  al  amount, 156 

make  regulations,  subject  to  approval  of  Secretary,  for  removal  of 

banking  associations  from  one  State  to  another  in  certain  cases 157 

sell  bonds  of  any  bank  going  into  voluntary  liquidation  and  omit 
ting  to  secure,  with'n  six  months,  the  redemption  of  its  notes 157 

And  after  providing  for  such  redemption,  with  expenses  of  sale,  to  pay 
over  balance  of  proeeec's,  if  any,  to  such  bank  or  its  legal  rcpresenta- 
*ive8...  .  158 


INDEX.  197 

PA<JB 

NATIONAL  BANKS—  Continued: 

COMPTROLLER  OF  THE  CURRENCY — Continued: 
Discretionary  powers  of: 

To  withhold  certificate  of  authorization  in  certain  cases 104, 10£ 

determine  maximum  increase  of  capital 109 

reduction  of  capital 109 

permit  exchange  of  bonds  deposited 117 

approve  of  redemption  agencies 122 

cancel  oonds  of  insolvent  associations 132 

or  dispose  of  the  same  at  public  auction  or  private  sale 133 

and  accept  in  payment  the  circulating  notes  secured  thereby...   133 

call  for  special  reports  from  banking  associations - 150 

CONFLICT  OF  OPINION,  in  decisions  of  State  courts  relative  to  taxation  of  national 

banks 12.7 

CONVERSION  OF  STATE  BANKS.     (See  State  banks.} 129 

CORPORATE  EXISTENCE,  dates  from  execution  of  preliminary  certificate  of  organiza 
tion  105 

duration  of;  powers  incident  to 105 

COUNTERFEITING,  uttering  false  notes,  engraving,  possessing,  or  using  false  plate,?, 
possessing  paper  adapted  to  such  use — felonious,  and  punishable 

by  fine  and  imprisonment 140 

CURRENCY  BUREAU,  establishment  and  functions  of 101 

where  to  be  located 102 

DEBTS  DUE  FROM  STOCKHOLDERS,  banks  have  no  lien  on  shares  for,  unless  expressly 

authorized  by  articles  of  association 106 

DEBTS  owing  to  banks  and  collectable  by  receiver,  the  term  defined 134 

DEPOSITARIES  OF  PUBLIC  MONEY,  banks  to  act  as,  when  designated  by  Secretary  of 

the  Treasury,  and  on  giving  satisfactory  security 130 

to  receive  at  par  all  national  bank  notes  paid  to  the  Government 131 

DEPOSIT  OF  BANK  FUNDS  with  bankers,  constitutes  a  loan  which  cannot  be  secured 

by  hopothecation  of  shares 123 

DEPUTY  COMPTROLLER,  appointment,  functions,  and  salary  of 101 

how  qual ified 102 

DIEECTORS,  qualifications  of,  oath  of  office 106 

may  be  appointed  in  first  instance  by  association 105 

provisions  relating  to  their  tenure  of  office 107 

Board  of,  number  requisite  for k 106 

vacancies  in,  may  be  temporarily  filled  by 107 

may  make  by-laws,  appoint  and  dismiss  officers,  and  fill  vacancies...  105-107 
wilful  violations  of  the  banking  laws,  by  or  with  knowledge  and  con 
sent  of,  to  work  a  forfeiture  of  franchise 136 

question  of  forfeiture  in  such  case  to  be  determined  in  a  Uni 
ted  States  court ,.   137 

personally  and  individually  responsible  for  damages  in  such  cases 137 

(See  Election.     Officers.} 

DISTRICT  ATTORNEYS,  to  conduct  suits  under  banking  laws 133 

but  private  counsel  may  also  be  retained 135 

DISTRICT  COURTS  OF  UNITED  STATES,  may  make  order  allowing  receiver  to  compro 
mise  doubtful  claims  in  favor  of  bank...     .  134 


198  INDEX. 

PAGE. 

NATIONAL  BANKS— Continued. • 

[•IVIDENDS,  may  be  declared  semi-annually 122 

none  to  be  made  while  a  deficiency  in  the  lawful  money  reserve  exists,  121 

nor  when  losses  equal  or  exceed  profits 124 

one-tenth  of  net  profits  for  the  six  months  next  preceding,  to  be  carried 

to  surplus  fund 123 

capital  not  to  be  diminished  in  form  of 121 

not  to  exceed  net  profits  on  hand  after  deducting  losses  and  bad  debts,  124 

ELECTION  OF  DIRECTORS,  after  those  first  chosen,  to  be  annual 107 

may  be  regulated  in  by-laws 106 

omission  of,  at  usual  time,  not  to  work  a  dissolution  of  association 107 

how  remedied 107 

each  share  entitled  to  one  vote  at 10S 

shareholders  may  vote  by  proxy  at;  officers,  etc.,  not  to  act  as  proxies...  108 

delinquent  shareholders  debarred  from  voting  at 108 

ENGRAVING,  to  be  done  under  supervision  of  Comptroller 115,  125 

EXAMINATION,  preliminary  to  authorization  by  Comptroller Ill 

objects  of,  and  how  made 112 

and  comparison  of  bonds  deposited 116 

to  be  made  by  banks  or  their  agents  annually 110 

on  completion  of,  result  to  be  certified  to  Treasurer,  117 

as  to  condition  of  banks,  to  be  made  from  time  to  time.  137 

EXAMINEES  OF  BANKS,  appointment,  duties,  and  compensation  of 137 

FIDUCIARIES,  holding  stock,  not  personally  liable.     (See  Shares.} 142 

FIRE-PROOF  VAULTS,  for  preservation  of  plates,  dies,  etc 102 

FORGERY,  of  notes,  etc.     (See  Counterfeiting.) 139 

GOLD  BANKS 154,  155 

circulation  of,  not  to  exceed  $1,000,000  each 154 

but  no  limit  to  aggregate  circulation 103,  115 

to  be  secured  by  deposit  of  United  States  bonds 154 

not  to  exceed  in  amount  eighty  per  cent,  par  value  of 

bonds  deposited 154 

circulating  notes  of,  not  to  be  under  five  dollars 154 

to  be  redeemable  in  gold  coin 154 

to  keep  reserve  in  coin  equal  to  25  per  cent,  of  outstanding  notes 154 

to  receive  at  par  notes  of  all  other  solvent  gold  banks 155 

subject  to  provisions  of  general  banking  law,  with  certain  exceptions,  155 

in  San  Francisco  need  not  redeem  at  New  York 122 

need  not  receive  currency  notes  at  par 122 

HOLDERS  OF  NOTES,  when  and  how  to  be  notified  in  case  of  voluntary  liquidation  1 28 

in  case  of  compulsory  liquidation.     (See  Liquidation.) 132 

HOLDING  OF  SHARES  AS  SECURITY,  when  prohibited 123 

HYPOTHECATION  OF  CIRCULATING  NOTES  forbidden 121 

INDEBTEDNESS,  never  to  exceed  capital  stock  paid  in 123 

exceptions  to  the  rule 123 

INDIVIDUAL  LIABILITY.     (See  Directors.     Shareholders.) 

INSOLVENT  OR  FAILING  BANKS,  notes  of,  not  to  be  paid  out  or  put  in  circulation. 

(See  Liquidation.) 124 

INTEREST,  rate  of,  on  loans  and  discounts 11? 


INDEX.  199 

PAOK. 

NATIONAL  BARKS— Continued: 
INTEREST — Continued: 

when  limited  to  seven  per  cent 119 

in  excess  of  legal  rate,  penalties  for  charging  or  taking 120 

lawful,  with  current  rate  of  exchange  added,  not  excessive 120 

INJUNCTION,  to  prevent  liquidation,  when  and  how  obtainable  by  banks 135,  136 

LIABILITY  OF  STOCKHOLDERS:     (See  Shares.    Shareholders.} 

limit  of,  par  value  of  shares,  exclusive  of  amount   in 
vested 108 

for  equitable  contribution  applies  to  all  who  can  be  reached 

by  legal  process 108 

when  enforced,  action  of  Comptroller  indispensable 134 

LIST  OF  SHAREHOLPERS,  to  be  kept  by  president  and  cashier 125 

what  to  contain 125 

to  be  subject  to  inspection 125 

who  may  inspect,  and  when 125 

copy  of,  to  be  transmitted  annually  to  Comptroller 125 

verified  by  oath  of  president  or  cashier 125 

LIQUIDATION  AND  CLOSING  OF  BANKS 127-129 

voluntary,  by  two-third  vote  of  shareholders  in  interest 127 

fact  of,  to  be  certified,  under  seal,  to  Comptroller 128 

to  be  published,  where  and  how 128 

holders  of  notes  and  other  creditors  to  be  notified  of 128 

within  six  months  from  date  of  vote  provision  must  be 

made  for  redemption  of  outstanding  notes 128,  157 

and  liability  of  association  on  account  of  such 

notes  terminated 128 

otherwise  bonds  may  be  sold  by  Comptroller 158 

redemption  and  disposition  of  notes  by  Treasurer.  ..  128,  129 
compulsory,  when  it  may  be  enforced,  viz: 

for  deficiency  in  surplus  required  to  be  maintained  by 

banks  with  capital  of  $5,000,000  or  upwards 108,  109 

failure  to  make  good  deficiency  in  capital  stock 110 

in  lawful  money  reserve 121 

select  redemption  agency 122 

redeem  circulation  at  par 122,  133 

dispose  of  stock  taken  to  secure  debts 123 

proceedings  on  failure  to  redeem 131-13^ 

notes  to  be  protested  unless  protest  is  waived 131 

or  unless  payment  has  been  restrained  by  order  of  court.  131 
notice  of  protest  or  waiver  to  be  forwarded  to  Comptroller.  131 
who  is  thereupon  to  appoint  a  receiver.  (See  Receiver.)...  133 

investigation  to  be  made  forthwith  by  Comptroller; 132 

special  agent  for,  to  be  appointed  and  im 
mediate  notice  given  to  bank 132 

pending  which,  bank  may  be  suspended...   131 
within  thirty  days  from  notice  of  failure,  bonds  on  de 
posit  may  be  forfeited 132 

holders  of  notes  to  be  thereupon  notified 132 


200  INDEX. 

PAOI. 

NATIONAL  BANKS—  Continued  • 

LIQUID ATON  AND  CLOSING  OF  BAXKS — Continued: 

notes  to  be  thereupon  redeemed  by  Treasurer 132 

Secretary  to  regulate  disposition  of  redeemed  notes.  132 

Comptroller  to  cancel  bonds  on  deposit 132 

or  dispose  of  them  at  public  or  private  sale 133 

limitations  and  conditions  relating  to  sale 133 

United  States  to  have  prior  lien  on  assets,  after 

payment  of  costs  and  expenses 132,  133 

proceedings  on,  may  be  stayed  by  injunction 135,  136 

where  injunction  is  to  be  obtained 139 

LOANS  AND  DISCOUNTS,  never  to  exceed  one-tenth  of  capital  stock  paid  in 110 

on  bonaf.de  paper,  under  certain  conditions,  not  included  within  the 

limit 119 

rates  of  interest  on,  regulated.     (See  Interest.) 119 

not  to  be  made  on  security  of  stock  of  banks  making  loan 123 

to  be  made  in  notes  of  solvent  banks  receivable  at  par 124 

MEMORANDUM,  on  bonds  transferred  to  Treasurer,  may  be  signed  by  officer  making 

the  deposit 112 

MISDEMEANORS.     (See  Officers.) 137 

MUTILATION  OF  NOTES,  &c.,  penalty  incurredfor 139 

MUTILATED  AND  WORN-OUT  NOTES,  may  be  exchanged  for  new 116 

to  be  burned 116 

NAME  OF  ASSOCIATION,  to  be  stated  in  preliminary  certificate 103 

in  case  of  State  banks  converted 129 

subject  to  approval  of  Comptroller 103 

OFFICERS,  to  be  appointed  and  dismissed  by  board  of  directors 105 

manner  of  appointment  to  be  regulated  by  by-laws 108 

and  employe's  not  to  act  as  proxies 1CS 

OFFICERS,  EMPLOYES,  OR  AGENTS,  when  to  be  deemed  guilty  of  misdemeanor...  137,  138 

what  acts  of,  forbidden,  and  how  punished 13tf 

persons  aiding  or  abetting,  liable  to  same  punishment  as 

principals 151 

to  whom  the  prohibitions  apply 152 

ORGANIZATION,  preliminary  steps  for 103,  104 

Articles  of  association,  what  to  contain  103 

no  change,  impairing  rights  of  creditors,  to  be  made  in 108 

may  provide  for  increase  of  capital 109 

Not  less  than  five  persons  competent  to  organize 103 

Certificate  of,  what  to  contain 103,  101 

to  be  acknowledged,  authenticated,  and  transmitted  to  Comptroller,  104 
certified  copies  of,  when,  where,  and  to  what  extent  legal  evidence..  104 

When  to  be  deemed  complete,  and  certified  by  Comptroller Ill,  112 

When  Comptroller's  certificate  may  be  withheld 104,  109 

PAR  VALUE  OF  SHARES,  one  hundred  dollars 108 

the  measure  of  liability  over  and  above  amount  invested..  108 
PERSONAL  LIABILITY  OF  STOCKHOLDERS,  when  it  is  to  be  enforced  action  by  Comp 
troller  indispensable.     (See  Receiver.) 134 

PLACE  OF  BUSINESS  to  be  designated  in  preliminary  certificate  of  organization 103 


INDEX.  201 

PAQR. 

NATIONAL  BANKS— Continued: 

PLATES  AND  DIES.     (See  Engraving.  Circulating  Notes.  Counterfeiting.) 115,125 

subject  to  control  and  direction  of  Comptroller 125 

expense  of,  how  provided  for  - 125 

POST  NOTES,  issuing  of,  for  circulation,  prohibited 11H 

PRESIDENT  to  be  selected  from  and  appointed  by  board  of  directors 105,  106 

to  give  security  if  required  by  association 105 

or  cashier  to  certify  payment  of  instalments  of  capital 110 

to  verity  final  statement  of  organization 112 

may  sign  annual  certificate  upon  examination  of  bonds  depos 
ited 117 

to  verify  semi-annual  returns 126 

reports  made  to  Comptroller 150 

and  reports  of  dividends  and  net  earnings 150,  151 

and  cashier  to  keep  list  of  stockholders 125 

or  cashier  to  certify  to  comptroller  vote  of  liquidation 128 

of  redemption  bank  may  waive  protest 131 

may  be  removed  at  any  time  by  board  of  directors 105 

PEIOKITY  OF  PAYMENT,  no  right  of,  in  the  United  States  as  against  private  creditors, 
except  for  amount  expended  in  redeeming  notes  of  insol 
vent  banks 135 

PROXY,  shareholders  may  vote  by 108 

no  officer,  clerk,  teller,  or  book-keeper  to  act  as 108 

PURCHASE  OF  SHAEES,  by  banks,  when  prohibited 123 

REAL  ESTATE  may  be  bought,  held,  and  conveyed  by  banks 118 

limitations  of  the  privilege 118,  119 

may  be  taxed  by  state  authority 127 

RECEIVER,  appointed  by  Comptroller,  and  subject  to  his  direction 133 

to  give  security  and  take  possession  of  books  and  assets 133 

collect  all  debts,  dues,  and  claims 13-1 

his  power  over  residue  of  proceeds  of  bonds  deposited,  diversity  of  opin 
ion  concerning 133,  134 

debts  to  which  proceeds  of  assets  may  be  applied  by 134 

succeeds  to  right  of  appeal  in  certain  cases 134 

is  a  United  States  officer,  and  may  bring  suits  in  his  official  capacity  in 

United  States  courts 134 

may  obtain  from  a  district  court  of  United  States  authority  to  compro 
mise  doubtful  debts 134 

is  the  statutory  assignee  who  must  institute  suits  for  recovery  of  debts 

due  bank;  creditors  of  banks  not  properly  parties 134 

a  proper  party  in  proceedings  for  adjudication  of  claims  against  bank  ..  135 
may,  under  order  of  court,  compound  doubtful  debts,  and  sell  real  and 

personal  estate 134 

may,  if  necessary  to  pay  debts  of  association,  enforce  individual  liability 

of  stockholders.     (See  Personal  Liability.) 134 

moneys  realized  uy,  to  be  deposited  with  Treasurer,  subject  to  order  of 

Comptroller 134 

expenses  of,  to  be  paid  from  assets  before  distribution '. 136 

may  be  enjoined  by  United  States  courts 135,  136 


202  INDEX. 

PAGB, 

NATIONAL  BANKS— Continued: 

REDEMPTION,  in  case  of  voluntary  liquidation;  notice  to  holders 128 

compulsory  liquidation;  notice  to  holders 132 

by  Treasurer,  regulations  concerning 53 

Comptroller,  provisions  concerning 156 

provisions  relating  to,  by  banks  while  in  operation 120-122,  135 

REDEMPTION  AGENCIES  in  New  York  city  to  be  selected  by  banks  in  Albany,  Bal 
timore,  Boston,  Chicago,  Cincinnati,  Cleveland,  Detroit, 
Louisville,  Milwaukee,  New  Orleans,  New  York,  Philadel 
phia,  Pittsburgh,  Saint  Louis,  San  Francisco,  and  Washing 
ton  City 122 

to  be  selected  by  other  banks;  where 122 

selection  of,  subject  to  Comptroller's  approval 122 

public  notice  of,  to  be  given  by  Comptroller 122 

failure  to  select;  penalty  for 122 

selection  of,  not  to  relieve  banks  from  obligation  to  redeem 

at  home 122 

REMOVAL  OF  BANKING  ASSOCIATIONS,  from  one  state  to  another 157 

REPEAL  OF  ORIGINAL  BANKING  ACT..  141 

REPORTS,  not  less  than  five,  to  be  made  by  each  bank  during  the  year 149 

form  of,  to  be  prescribed  by  Comptroller 150 

to  be  verified,  and  how ;   what  to  exhibit 150 

published;  where  and  how;  expense  to  be  paid  by  banks;  proof 

of  publication 150 

special,  may  be  required;  when 150 

penalty  for  failure  to  transmit 150 

of  dividends  and  of  net  profits  to  be  made  to  Comptroller 150,  151 

RESERVES  to  be  kept  by  currency   banks  for  purposes  of  redemption.     (See  Gold 

Banks.} 120-122 

not  less  than  two-fifths  to  consist  of  United  States  notes 120,  148 

three-fifths  may  consist  of  three  per  cent,  certificates 28,  120 

three  per  cent,  certificates  called  in,  not  available  for 147,  154 

certificates  of  deposit  may  be  used  for 27,  28,  120 

of  banks  in  redemption  cities  to  be  not  less  than  25  per  cent,  of  aggre 
gate  circulation  and  deposits.  , 120 

of  all  other  banks  not  less  than  15  per  cent 120 

when  below  the  limit,  to  be  restored  to  the  required  proportion 120,  121 

until  restored,  liabilities,  with  certain  exceptions,  not  to  be  increased...   121 

no  dividends  to  be  made 121 

of  banks  whose  notes  are  redeemed  in  New  York  may,  to  the  extent 
of  three-fifths,   consist   of    available   balances   due    at    redemption 

agency 121 

of  banks  in  redemption  cities  may,  to  the  extent  of  one-half,  consist  of 

cash  deposits  in  New  York 122 

of  all  banks  may  consist  in  part  of  clearing-house  certificates 121 

RICHMOND,  when  to  be  added  to  list  of  cities,  etc.     (See  Charleston.} 121 

SAN  FRANCISCO,  gold  banks  at,  need  not  redeem  at  New  York 122 

SEAL,  of  Comptroller  of  the  Currency,  provisions  relating  to 102 

corporate,  may  be  adopted  by  banking  associations 105 


INDEX.  203 

PAGE 
NATIONAL  BANKS— Continued: 

SECRETARY  OF  THE  TREASURY: 

His  approval  requisite  as  to  sureties  of  Comptroller 102 

form  of  seal 102 

organization  of  banks  where  population  is  not 

over  6,000 104 

appointment  of  receivers 121 

special  agents 132 

bank  examiners... 13V 

withdrawal  of  circulation  from  States  having  an 

excess 155,  156 

removal  of  banks  from  such  States  to  States  en 
titled  to  increase 157 

To  authorize  the  voluntary  exchange  of  securities  deposited Ill 

and  to  prescribe  the  conditions  of  exchange  in  case  of  depreciation 117 

apportion  circulation  in  certain  cases 114 

control  the  manner  of  engraving  plates  and  dies 115 

and  the  form  and  contents  of  circulating  notes 115 

appoint  one  of  four  persons  to  superintend  the  burning  of  worn-out  and  muti 
lated  notes 116 

and  prescribe  regulations  relative  thereto 116 

designate  banks  as  depositaries,  and  make  regulations  concerning  them 130 

require  from  such  depositaries  satisfactory  security 130 

regulate  the  manner  of  notifying  holders  of  the  notes  of  insolvent  associations,  132 

disposition  of  such  notes  after  redemption , 132 

withdrawal  of  circulating  notes  by  banks  of  issue 146 

issue  temporary  loan  certificates 28,  147 

and  redeem  and  cancel  the  same  in  proportion  to  increase  of  national 

bank  circulation 29,  153 

SHARES,  par  value  of,  $100 108 

of  State  banks  when  converted  into  national,  may  continue  as  before 120 

held  by  executors  or  other  trustees,  subject  to  liabilities  imposed  on  origi 
nal  stockholders 142 

SHAREHOLDERS,  names  and  residence  to  be  stated  in  preliminary  certificate 104 

entitled  to  one  vote  on  each  share 108 

delinquent,  may  not  vote 108 

may  be  sold  out  on  notice 110 

by  transfer,  succeed  to  rights  and  liabilities  of  prior  holders 108 

liability  of,  several  and  not  joint 108 

extent  of,  denned 108 

in  case  of  State  banks  converted 108 

may  fix  date  of  election  in  certain  cases 107 

by  vote  of  two-thirds  in  interest  may  reduce  capital  stock 109 

or  go  into  liquidation 127 

limitation  and  conditions  of  reduction 109 

list  of,  provisions  concerning 125 

SOLICITOR  OF  THE  TREASURY,  to  have  supervision  of  suits,  &c 138 

SPECIAL  AGENT  for  investigation  of  banks 132 

appointed  by  Comptroller  with  approval  of  Secretary '.....   132 

\o  report  to  Comptroller 132 


204  INDEX. 

PAQH 
NATIONAL  R  ASKS— Continued: 

STATE  BANKS,  converted  into  national ;  liability  of  shareholders — when  limited  to 

amount  invested 108 

when  to  pay  tax  due  from  former  bank 146,147 

conversion  of,  how  effected..., 129 

shares  to  remain  as  before;  directors  continued 129 

receiving  assets,  acquire  liabilities  of  old  banks 129 

such  assets   include  right  of  action   for   damages  resulting  from 

fraudulent  misapplication  of  property  of  former  bank 129 

may  continue  to  hold  stock  in  other  banks 130 

when  to  commence  business;  conditions  annexed 130 

with  branches,  may  keep  branches  in  operation 129,  145 

SUITS  AND  PROCEEDINGS,  against  banks  under  the  banking  laws,  to  be  conducted 

by  district  attorneys,  subject  to  supervision  of  Solicitor 138 

private  counsel  may  appear  in 138 

where  and  in  what  courts  to  be  had 138 

different  opinions  in  Massachusetts  and  New  York 138-139 

to  be  instituted  by  Comptroller  in  his  own  name 130,  137 

may  be  brought  by  as  well  as  against  banks 138 

TAX,  imposed  by  State  authority 86,  126,  127 

where  to  be  levied 126,  148 

limitations  concerning 126,  148 

notes  and  decisions  relative  to 126,  127 

by  federal  authority;  existing  taxation 125,  126,  159 

amount  of,  may  be  reserved  by  Treasurer  out  of  in 
terest  falling  due  on  bonds  deposited 126 

semi-annual  returns  to  be  made,  relative  to  circulation,  deposits,  and  capital.  126 

verified  by  oath  of  president  and  cashier 126 

in  case  of  default  in  making  returns,  how  assessed 126 

penalty  for  such  default,  and  how  collected 126 

of  ten  per  cent,  on  notes  of  State  banks  paid  out:    held  by  Supreme  Oourt 

of  United  States  to  be  constitutional , 145 

applies  to  notes  which  a  bank  pays  out  of  its  own  issue....   145,  146 

on  notes  of  towns,  cities,  or  municipal  corporations  paid  out 148 

regulations  for  ascertainment  and  payment  of 160-164 

TRANSFER  OP  STOCK,  when  binding  as  to  transferee  in  good  faith;  bank  when 

liable  for  value  of  stock 106 

UNITED  STATES  BONDS,  definition  of,  as  used  in  banking  laws 103 

VICE-PRESIDENT,  to  be  appointed  by  board  of  directors 105 

may  sign  circulating  notes 115 

VOLUNTARY  LIQUIDATION,  may  be  ordered  by  vote  of  shareholders 127 

notice  of,  to  be  certified  by  president  and  cashier,  under 

seal,  to  Comptroller,  and  published 128 

in  case  of,  how  notes  may  be  redeemed  under  regulations..   53 
NAVY  PENSION  FUND: 

Origin  and  object  of 29 

Amount  of 30 

NOTES: 

Fractional,  not  to  be  issued  by  individuals,  private  corporations,  or  banking  asso 
ciations ..  45 


INDEX.  205 


NOTES—  Continued: 

Of  individuals  and  of  State  banks,  paid  out,  ten  per  cent,  tax  on  .................  145,  146 

Of  towns,  cities,  and  municipal  corporations,  do.  do  ........................................  148 

(See  United  States  Notes.     Old  Demand  Notes.     National  Banks.) 

0. 

OBLIGATION: 

Of  the  United  States  to  pay  in  coin,  according  to  contract  ............................  79,  82 

OLD  DEMAND  NOTES: 

Originally  limited  to  fifty  millions  ................................................................  43 

Increased  to  sixty  millions,  and  date  of  issue  limited  .........................................  43 

Superseded  by  United  States  notes,  under  act  of  February  25,  1862  .....................  35 

but  equivalent  to  coin  for  public  dues,  duties,  &c  ...................................  44,  82 

When  presented,  are  redeemed  in  coin  and  canceled  ..........................................  44 

No  longer  issued  .....................................................................................  44 

OREGON  WAR  DEBT: 

Origin  of  .................................................................................................   21 

Bonds  payable  to  order,  with  coupons  payable  to  bearer  ....................................  22 

transferable  by  assignment  only  ..........................................................  22 

OVER-DUE  COUPON  BONDS: 

Legal  rules  applicable  to-  ........................................................................  64,  65 

OVER-ISSUE: 

Of  bonds,  notes,  or  currency;  none  ever  redeemed  or  presented  for  payment  .........  25 

P. 

PACIFIC  RAILWAY  BONDS: 

Known  as  "currency  sixes;"  description  of  .........................  ...........................  31 

Are  all  registered  and  payable  in  lawful  money  ...............................................  31 

Are  purely  Government  obligations  ...............................................................  31 

Schedule  of  bonds  issued  .........  ......................................................................  32 

Acts  authorizing  issue  ........................................................  ,  ...................   33,  34 

Security  of  the  Government,  conditions  annexed,  &c  ....................................  33,  31 

Provisions  relative  to  priority  of  liens  ............................................................  34 

Preference  in  transportation  reserved  to  the  Government  ...................................  31 

POSTAGE  CURRENCY: 

Origin  of,  and  laws  relating  to  .........................  ........................................  44,  45 

Withdrawn,  and  fractional  currency  substituted.     (See  Fractional  Currency')  ..........  47 

R. 

REBATE  OF  INTEREST: 

When  exacted;  what  interest  subject  to  .......................................................  71 

Detached  coupons,  when  subject  to.     (See  Interest.)  ..........................................  77 

REDISTRIBUTION  OF  CURRENCY  NOTES:     (See  National  Banks)  .....................  155 

REDUCTION  OF  THE  PUBLIC  DEBT: 

By  purchase  of  bonds;  authority  for  .............................................................   72 

By  operation  of  the  sinking  fund  .............................................................   82-85 

Comparative  statement,  of  ..........................................  ..........................  92,93 

Monthly  debt  statement  .............................................................................   78 

REGISTERED  BONDS: 

Transfer  of,  regulations  concerning  .............................................  .............   55-6(? 


206  INDEX. 

PAGE. 

REGISTERED  BONDS—  Continued: 

Transfer  of,  by  representatives  of  deceased  owners 57 

in  case  of  owners  dying  abroad 57 

general  forms  for 58-60 

books,  when  closed  and  for  what  period ; 56 

of  stock  during  such  period;  how  it  affects  payment  of  interest 57,  69 

Power  of  attorney  to  collect  interest 70 

Interest  on,  of  funded  loans,  payable  by  check  sent  through  the  mails 69 

of  all  other  loans,  payable  at  designated  offices 69 

Designation  to  be  made  by  holders 69 

Interest  on,  when  not  claimed 70 

When  lost  or  stolen,  notice  to  be  given 60,  62 

Lost  or  destroyed,  may  be  duplicated 61 

Mutilated  or  defaced  ;  regulations  concerning 63,  67 

Acts  authorizing  issue  of  duplicates 61,  66,  68 

Cannot  be  converted  into  coupon  bonds 68 

RESERVES: 

Of  United  States  notes  in  Treasury,  authorized  by  law;  acts  relating  to 37,  39 

construction  of  the  law  as  practically  adopted 38 

limit  of  reserve  forty-four  millions 40 

Of  coin  in  Treasury.     (See  Coin) 72 

Of  lawful  money  to  be  kept  by  banks.     (See  National  Banks] 27,  28,  120-122, 147 

Of  coin  to  be  kept  by  gold  banks.     (See  National  Banks) 154 

RULES  AND  REGULATIONS: 

For  redemption  of  mutilated  and  defaced  currency 49-54 

transfer  of  registered  bonds 55-60 

duplicating  certificates,  when  lost  or  destroyed 62-64 

defaced  bonds,  coupon  or  registered 66-68 

payment  of  interest  on  registered  bonds 69,  70 

sales  of  gold  and  purchase  of  bonds 73-75 

payment  of  detached  coupons. 76,  77 

Practically  governing  the  management  of  the  sinking  fund 82-85 

Relating  to  the  payment  of  duties  by  national  banks 160-164 

S. 

SALES  OF  BONDS,  in  case  of  insolvent  banks.  (See  Comptroller  of  the  Currency.")  133, 156, 157 

SALES  OF  GOLD: 

Act  of  authorization 72 

Practice  of  the  Department  since  March,  1869 73 

Public  notice  given;  form  of 73 

Proposals  for  purchase;  form  of 75 

SAVINGS  BANKS: 

Deposits  in,  may  be  taxed  by  State  authority 86 

How  taxed,  and  to  what  extent,  under  Federal  authority 144,159 

SINKING  FUND: 

Law  establishing 82 

When  fund  commenced 83 

Bonds  purchased  for,  canceled  and  destroyed 84 

Act  of  Congress  requiring  cancellation 83,  84 


INDEX.  207 

PAGE. 
SINKING  FUND— Continued: 

Management  of;  accounts,  how  kept 84 

Not  a  source  of  expense  to  the  Government 85 

When  it  will  extinguish  the  public  debt 85 

SIXES  OF  1381:     (See  Bonds  payable  in  Coin.) 

Synonym  for  loan  of  1863 16 

loan  of  July  and  August,  1861 20 

loan  of  February,  1861 22 

STATE  BANKS:    (See  Banks  and  Banking  Associations.   Taxation.) 99 

STOLEN  BONDS: 

If  registered,  Treasury  Department  should  be  notified;  duplicates  may  be  obtained..  60 
If  coupon,  Government  affords  no  remedy 66 

T. 

TAXATION  UNDER  FEDERAL  AUTHORITY 159 

Of  bonds  and  other  obligations  of  the  United  States 87 

On  circulation,  deposits,  and  capital  of  national  banks 125,  146 

Of  ten  per  cent,  on  notes  of  persons  and  State  banks,  used  for  circulation  and  paid 

out  by  State  or  national  banks 145 

on  notes  of  towns,  cities,  or  municipal  corporations,  so  used  and 

paid  out 148 

On  deposits,  capital,  and  circulation  of  banks  and  bankers  other  than  national 

banks 142,  143 

payable  semi-annually,  but  assessed  monthly 158 

meaning  of  capital  employed 143,  158 

On  circulation  of  banks  not  levied  when  it  does  not  exceed  five  per  cent,  of 

capital 146 

On  banks  and  other  institutions  for  deposit  of  savings 144 

no  tax  on  deposits  invested  in  United  States  securities 144 

individual  deposits  to  amount  of  $2,000  exempt 159 

Under  existing  laws,  notes  relative  to 159 

Regulations  concerning  assessment  and  payment 160-164 

TAXATION  UNDER  STATE  AUTHORITY: 

On  bonds  and  other  obligations  of  the  United  States  held  by  State  or  national 

banks 85,86 

cases  referred  to ' 85,  86 

On  deposits  in  savings  banks  invested  in  United  States  securities 86 

On  shares  in  national  banks 126 

decisions  and  notes  concerning 127 

"Place"  where  tax  on  national  banks  may  be  levied 148 

TEN-FORTY  BONDS: 

Authority  for  issue  of;  description  of 15,  16 

Only  loan  redeemable  in  ten  and  payable  in  forty  years - ]0 

THREE-PER-CENT.  CERTIFICATES: 

Act  of  authorization 47 

Issued  for  purpose  of  retiring  compound-interest  notes ? 28,  147 

Piincipal  and  interest  payable  in  lawful  money  on  demand 28.  147 

May  be  held  as  portion  of  bank  reserves 28,  14? 


208  INDEX, 

i 
THREE-PER-CENT.  CERTIFICATES— Continued: 

Original  limit  fifty  millions,  increased  to  seventy-five .*. 29, 

When  they  cease  to  bear  interest 29, 

TREASURY  NOTES:     (See  Old  Demand  Notes.} 

U. 
UNCLAIMED  INTEREST: 

On  registered  stock,  when  and  how  disposed  of , 

after/ ninety  days,  collectable  only  at  Treasury 

UNITED  STATES  BONDS:     (See  Bonds) 1 

UNITED  STATES  NOTES: 

Acts  of  authorisation 3£ 

Limit  of  issue;  highest  amount  issued 38 

Retirement  and  cancellation  of;  act  suspending  the  same 

Amount  then  outstanding  356  millions 

Cannot  be  reduced  without  further  legislation 

Reserve  of  forty-four  millions;  how  created 3£ 

use  of,  discretionary 

Redeemable  in  coin ;  question  adj  udicated 

Constitutionality  of  legal-tender  provisions 

When  not  a  legal  tender;  decisions  on  the  subject 

Four  different  issues  of ;  when  made 42 

First  two  issues  of,  exchangeable  for  5-20  bonds 

Not  exchangeable  for  bonds  since  July  1,  1863 

None  of  first  three  series  reissued  after  redemption 

Printed  on  distinctive  paper;  penalties  in  certain  cases 

Mutilated  or  defaced,  regulations  for  redemption  of. 49 

Redemption  of,  in  coin,  the  faith  of  the  United  States  solemnly  pledged  to 

Withholding  of,  from  use,  when  a  misdemeanor 


•I -I  94  ?  it 


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